NORTHERN Rock declared its commitment to the region yesterday after reporting record lending for mortgages and loans in the last six months.

The Newcastle mortgage bank's half-year results showed the effect of the booming property market, with continued growth meaning the bank now has a 7.8 per cent share of UK net mortgage lending.

Pre-tax profits were £122m, up from £112m last time, with the demand for residential mortgages remaining buoyant.

While the housing market was slowing, it's report said it did not expect a "boom to bust" cycle.

In the six-month period, residential lending totalled £1.5bn, compared with £781m last time.

The number of people falling into arrears or who had their houses repossessed also fell, in a further sign of the strength of the property markets and the economy as a whole.

In the six month period only 0.8 per cent, or 2,803, of all Northern Rock's mortgage accounts were in arrears, a 25 per cent improvement on the period before.

And just 260 properties were repossessed compared with 352 at the end of last year.

Finance director David Baker welcomed the results saying: "We will be sticking to our core market, and hoping to see our share of mortgage lending grow."

The company, which prides itself as "one of the fastest growing mortgage lenders in the UK", is expecting a 5.7 per cent increase in house prices in the second quarter of the year.

As well as its mortgage business Northern Rock now sees 10 per cent of all its lending coming through the Internet, and at present it sees that figure continuing to grow.

Mr Baker added: "With the Internet we see more customers looking at personal lending and loans more than mortgages.

"But 10 per cent of all our lending comes through the Internet and we believe that figure will continue to grow."

The former building society, which converted to a bank three years ago, is set to further invest in the region, despite closing 29 of its branch offices before Christmas.

Mr Baker added: "We remain committed to our customers and to the region. We realise the importance of our branch customers and there are have no plans for any further closures."

The firm which presently employs 2,000 people in the region has the scope to massively increase its Newcastle head office, with the potential to house a further 5,000 staff.

The group also announced it will commit a further £6m to the Northern Rock Foundation which has handed out £23m to North-East charities in three years. Chief executive Leo Finn said: "Northern Rock has been revitalised. We have returned to rapid growth. "

The announcement brought good news for customers who held on to their shares after conversion. A £25.50 payment takes their dividend payments since October 1997 to £188.