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UK Politics

Blairs secured home loan on £20m earnings estimate

Details of how Tony and Cherie Blair managed to bankroll the purchase of their new £3.6m home in London have emerged in documents obtained by The Independent.

Papers filed with the Land Registry in Harrow, north-west London, show that the Blairs' mortgage deal was arranged by the Cheltenham & Gloucester building society, one of the few UK lenders willing to grant multimillion-pound mortgages on the basis of a client's "affordability" rather than annual income. The Blairs' decision to opt for the C&G helps answer the question of how they were able to secure such a big mortgage with only modest savings.

The title documents for the house in Connaught Square, Bayswater, also confirm the sale price as being £3.6m, paid to an art historian, Roger Bevan, on 2 September this year.

Sources close to Downing Street say the Prime Minister managed to negotiate an advantageous deal by claiming that he could earn up to £20m within five years of leaving 10 Downing Street. A "tacit agreement" with a publisher for a seven-figure book deal is said to have helped convince the building society that he was a safe risk.

The Blairs intend to recoup most of the cost of their mortgage repayments, estimated to be £12,000 a month, by letting out the property. Home buyers who use a C&G buy-to-let mortgage must comply with its strict terms. These include only using a "professional letting agency" with whom the client has no previous connection. And the C&G insists the client can only have a "maximum of three buy-to-let properties, plus one residential property with the Lloyds TSB group [the owner of C&G]."

Separate papers lodged with the Land Registry reveal that, at Christmas last year, the Blairs switched from the Halifax to the C&G after taking out a new loan on Mr Blair's constituency home in Sedgefield. Three months later, Mr Blair rejected finance-union calls to intervene to stop Lloyds TSB transferring 1,500 jobs from Britain to India.

Lloyds TSB Group Union, which represents more than 45,000 staff, collected 500,000 signatures from customers outside Lloyds TSB branches across the UK who are opposed to banking services being handled by staff based overseas. But the Prime Minister warned in a speech that outsourcing was "necessary for business to survive" in a globalised economy and rejected calls for "protectionism" to stop the practice.

Under the terms of the land registration, the Blairs were also warned of restrictive covenants in the property's deed relating to land abutting an 18th century burial ground. The Blairs must also not do anything that might interfere with the right to "air and light" of a terrace of mews houses that backs on to their small garden.

News that the Blairs have a house in Bayswater has failed to the lift the local market. None of the four properties in Connaught Square on the market has been sold and estate agents report a "lack of movement".