I feel your financial pain, says Clegg as he gives up Ocado

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Indy Politics

Facing up to the grim reality of spiralling prices and renegotiating a mortgage? Well, you are not alone. Nick Clegg knows a little about the sharp edge of the credit crunch.

In an interview with The Independent, the Liberal Democrat leader said that he and his family have been affected by the downturn in the UK housing market, finding themselves "mortgaged up to the gills".

Mr Clegg moved into his house in lush Putney, south-west London, two-and-a-half years ago with his wife Miriam and their two young sons. His original fixed-rate mortgage expired last year, forcing him to search for a new deal in an unforgiving market.

He said: "Without going into the gory details of our family finances, we are mortgaged up to the gills like a lot of other people. I had a two-year, fixed-rate deal which ran out, and it has been very painful to move on to a different one – like millions of other people."

Mr Clegg emphasised that he and his wife have not experienced the same level of financial hardship faced by many families across the country, but said that their challenges were indicative of the greater pressures faced by others. He even said recently that his wife was "gravitating away from Ocado towards Sainsbury's, just on price. I have to say, the difference is pretty big".

But he told The Independent: "I'm much luckier than other people. My wife and I are not really struggling to put food on the family supper table. My wife works – she's a full-time lawyer – [and] I work, so we have two incomes.

"We are very lucky, but we need every penny of those two incomes. If we do, I can't imagine what it is like for the many millions of British families who aren't as lucky as we are," he added.

The Cleggs live in what estate agents describe as "one of the most desirable streets" in Putney, a leafy and affluent London suburb within easy commuting distance of Westminster. The road is lined with semi-detached, five-bedroom Victorian houses, most of which are valued at around £1.3m.

The majority of people who live in the area are wealthy, middle-class families with few signs of major financial worries, much like the Liberal Democrat leader and his clan. Although most properties in the area have lost value, in keeping with national trends, Mr Clegg's home should have survived relatively unscathed.

Jane Rich, editor of the property website UpMyStreet, said: "Although Nick may be feeling the impact of the credit crunch in terms of his new mortgage, the value of his home looks secure at this stage, and his equity may have increased significantly since buying."

However, the renegotiation of his mortgage has given Mr Clegg such a financial headache recently that he has started to tighten his purse strings in other areas.

He still takes his holidays overseas – unlike his political counterparts Gordon Brown and David Cameron – but now shuns expensive hotels. His house is less rigorously heated than it used to be, and he also recently ditched his Liberal Democrat car and replaced it with an electric moped, happy in the knowledge that he is saving a fortune on fuel.

He said: "I hardly drive a car any more... we heat the house less, [and] turn the heating down. We always have very frugal holiday tastes because we just go and stay with my in-laws in Spain."

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