MPs' expenses: Tony Blair facing questions over the £296,000 mortgage - Telegraph
MPs' expenses: Tony Blair facing questions over the £296,000 mortgage - TelegraphMPs' expenses: Tony Blair facing questions over the £296,000 mortgage
Tony Blair is facing fresh questions over how he funded his multi-million-pound property empire after details of the former Prime Minister's claims were leaked to The Sunday Telegraph.
View of Tony Blair's home in Connaught Square in Central London Photo: Christopher Pledger
The documents show that Mr Blair remortgaged his constituency home for £296,000, almost 10 times what he paid for it, months before he bought his town house in London for £3.65 million. Mr Blair was able to claim on his parliamentary expenses for the interest repayments on almost a third of the new mortgage on his constituency home.
The amount loaned was sufficient to cover the deposit on his house in Connaught Square, west London, one of five properties owned by the former prime minister, valued at £10 million in total.
Although Mr Blair did not break parliamentary rules, dozens of MPs appear to have used similar strategies to build property portfolios, which has given rise to suggestions that they "played the system".
Mr Blair, who has earned about £16 million since leaving office, through public speaking, directorships and a book deal, bought his constituency home in Trimdon, County Durham, shortly after he was elected as an MP in 1983.
He took out a £30,000 mortgage to buy the house, later remortgaging it for about £90,000 to cover the cost of improvements and renovations.
The parliamentary Green Book, which sets out the rules on what MPs can claim, states that members can increase their mortgages to pay for improvements if they have the prior permission of the fees office.
Mr Blair remortgaged the property for a second time at the end of 2003. He secured a loan of £296,000 from the Cheltenham & Gloucester, on a house that was worth an estimated £250,000 to £300,000 at the time. This suggests that the lender may have taken into account Mr Blair's ability to claim part of the interest on his expenses, when it agreed the mortgage.
The additional £206,000 which Mr Blair borrowed on top of the original purchase price and cost of renovations was enough to cover the £182,500 deposit he put down on Connaught Square, which was also bought with a Cheltenham & Gloucester mortgage.
David Hollingworth, a mortgage expert from London and County, said it was entirely possible that Mr Blair used the money raised on the Durham house to pay the deposit on Connaught Square.
"It would be possible to raise money on one property for the purpose of buying another," he said. "A lot of people remortgage their main home to obtain a buy to let mortgage, and others do it to raise a deposit for their sons or daughters, for example.Having said that, if someone came to me wanting to buy a £3.65 million property with a five per cent deposit which they had raised on another property, I would consider that a pretty tricky case."
The question of how Mr Blair was able to obtain a £3,467,500 mortgage on Connaught Square, which was more than 18 times his salary at the time, has always been surrounded in mystery.
The house took the couple's mortgage commitments to £4 million, which included the Durham property, and two flats in Bristol, one of which has since been sold.
Since leaving office, Mr Blair has bought an £800,000 mews house behind Connaught Square, which has been knocked through to make one property, and a £4 million house in Buckinghamshire, which was the home of the late Sir John Gielgud.
Mr Blair's parliamentary expense forms show that he claimed £387 per month in mortgage interest, just under a third of the total monthly interest payments on the Durham house. One claim form, for 2005-06, is covered with handwritten sums detailing each month's mortgage interest claim to the penny, which vary by around £20 per month as the interest rate changes.
His claim forms for the Additional Costs Allowance for 2004-2007, when he stepped down from parliament, also showed that he claimed £2,218 to pay his cleaner, £2,874.47 for utility bills, £177.13 for food and £15 to pay his window cleaner. He also claimed £1,399.22 for council tax, £458.79 for repairs and £131.50 for his television licence. Among the incidental expense claims are an annual newspaper bill of £1,167.48, regular bills for his Orange mobile phone and £515.75 for the delivery and installation of a Siemens dishwasher.
A spokesman for Mr Blair said yesterday: "Mr Blair only claimed back the interest repayments on the portion of the mortgage which covered the purchase price and improvements to the house. There was no cost to the taxpayer in the rest of the money raised against the property."
