Northern Rock PLC
11 January 2008



                                NORTHERN ROCK PLC

                                11 JANUARY 2008

                              NORTHERN ROCK UPDATE



Sale of 'Lifetime' mortgage portfolio


Northern Rock plc (the 'Company') announces that it has agreed to sell its
portfolio of Lifetime home equity release mortgages (the 'Lifetime Portfolio')
to JPMorgan.


The Lifetime Portfolio comprises gross assets with a balance sheet value of £2.2
billion, representing approximately 2 per cent of the Company's total assets at
30 June 2007. The Lifetime Portfolio earned net interest income of £34 million
during the 12 months to 30 June 2007. However, in view of the Company's current
and assumed future funding costs under the facilities with the Bank of England,
on which interest is charged at a penal rate, the future net interest income
which would have been earned on the Lifetime Portfolio if it had been retained
by the Company would have been significantly lower. The price represents a
premium of 2.25 per cent, or approximately £50 million, over the balance sheet
value of the portfolio. The proceeds from the sale are payable in cash and will
be applied by the Company to reduce its current funding from the Bank of
England. Completion is expected to occur on 11 January 2008.


As part of the disposal, the Company will continue to service the Lifetime
Portfolio on behalf of JPMorgan and continue to originate Lifetime loans to its
balance sheet.


The Board considers that this sale of a discrete portfolio of assets is in the
best interests of shareholders and is consistent with the scope of the Company's
ongoing strategic review. The Board also notes that this disposal would be
within the terms of the resolutions to be put to shareholders at the
Extraordinary General Meeting (EGM) which has been requisitioned and is to be
held on 15 January 2008, if such resolutions were passed.


Chief Executive Andy Kuipers commented:


'This is a relatively small transaction, representing around 2 per cent of
Northern Rock's gross assets, but it is a positive development in the Company's
ongoing strategic review. It illustrates the quality of our assets, which has
enabled us to achieve a sale at a premium despite continuing difficult financial
markets, and will allow the Company to reduce its debt to the Bank of England.'



City Contacts                      Press Contacts

Richard Moorin                     Brian Giles
Investor Relations                 Communications Director
0191 279 4093                      0191 279 4676

Simon Hall                         John C Watson
Investor Relations                 Corporate Communications
0191 279 6090                      0191 279 5295
                                   
                                   Ron Stout
                                   Corporate Communications
                                   0191 279 4921
                                   
                                   James Murgatroyd
                                   Finsbury Limited
                                   020 7251 3801





Merrill Lynch International, The Blackstone Group International Limited
('Blackstone') and Citigroup Global Markets Limited ('Citi'), which are
authorised and regulated in the United Kingdom by the Financial Services
Authority, are acting exclusively for Northern Rock plc and no-one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than Northern Rock plc for providing the protections
afforded to clients of Merrill Lynch International, Blackstone or Citi nor for
providing advice in relation to the matters referred to in this announcement.






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