Mandelson 'would have needed £5million mortgage to buy his £7.6million mansion'

  • Revelation prompts further questions on how former Business Secretary can now afford lavish lifestyle

Former Cabinet Minister Lord Mandelson paid £7.6 million for his new home in one of London’s most exclusive districts, according to documents lodged with the Land Registry.

Mortgage experts estimate the Labour peer would have required a mortgage of about £5 million to finance the purchase, after putting down a deposit of £2.6 million.

The massive sums involved raise fresh questions about how the former Business Secretary is able to afford such a lavish home.

Plush pad: But questions are now being asked about how Lord Mandelson could afford such an expensive home so shortly after leaving office

Plush pad: But questions are now being asked about how Lord Mandelson could afford such an expensive home so shortly after leaving office

The Mail on Sunday revealed in August that Lord Mandelson had made an offer to buy the Grade II listed Gothic Revival property, which was on the market for £8 million. He had previously been seen viewing the four-storey house with his long-term partner Reinaldo da Silva.

Land Registry records show that he completed the deal on September 23 with the help of a mortgage from the private banking operation of financial services giant HSBC. The size of the loan is not revealed.

However, Ray Boulger, of mortgage broker John Charcol, said that the  58-year-old politician could have obtained a loan amounting to five times his annual income.

Setting up home: Lord Mandelson, seen with his partner Reinaldo da Silva, completed the sale in September

Setting up home: Lord Mandelson, seen with his partner Reinaldo da Silva, completed the sale in September

This suggests that Lord Mandelson has an  income of £1 million a year, compared with his annual £104,000 salary during his time in Government under Gordon Brown.

Mr Boulger said: ‘Private banks  have different rules and there is no standard repayment term. But taking into account Lord Mandelson’s age, it is unlikely to be longer than 15 or  16 years.’

Assuming Lord Mandelson was able to obtain a competitive interest rate of about 2.5 per cent on a normal repayment home loan, he would face a monthly charge of £31,916. That figure would fall to £10,417 a month if he took out an interest-only mortgage.

Lord Mandelson’s earnings since leaving office after Labour’s General Election defeat last year have been the subject of intense speculation. Last year he set up a company, Global Counsel LLP, for which he acts as an international business consultant. This left him facing accusations that he was cashing in on the many contacts he made during his time in Westminster – where he also served as Trade and Industry Secretary under Tony Blair – and as a European Commissioner in Brussels.

Under restrictions imposed by Whitehall watchdogs, the peer is banned from lobbying Ministers and civil servants for two years after leaving office because of the senior positions he previously held in Government.

Grand designs: The property boasts an atrium and a wine cellar

Grand designs: The property boasts an atrium and a wine cellar

Lord Mandelson, who once admitted in a speech to technology executives in California that Labour was ‘intensely relaxed’ about people getting ‘filthy rich’, appears to have amassed at least part of his wealth from a series of shrewd property investments.

He bought his previous home  in Primrose Hill, North London, for £2.4 million in 2006. Within two years of the purchase, he claimed to have paid off the mortgage.

Lord Mandelson sold the property in September for £3 million, earning himself a tidy £600,000 profit.

His latest residence was built in 1827 and overlooks a park. It features a wine cellar, a two-storey atrium and elegant reception rooms.

The master bedroom occupies the entire second floor and there are three bathrooms and two dressing rooms. Estate agents describe it as a beautiful period house which has been meticulously refurbished, and say it is an enchanting location.

When this newspaper revealed the proposed purchase in the summer, Conservative MP Richard Bacon, a member of the powerful Commons Public Accounts Committee, said: ‘It is a matter of considerable public interest how he can afford such an expensive home within barely a year of leaving Government.’

Another of Lord Mandelson’s property purchases proved controversial. He bought a house in Notting Hill, West London, in 1998 for £475,000 with the help of a mortgage of £150,000.

But Lord Mandelson resigned from the Cabinet after it was disclosed that he used a secret £373,000 loan from fellow Minister Geoffrey Robinson to help fund the purchase. A spokesman for Lord Mandelson said: ‘All of the figures which you are intending to use that are not already on the public record are ill-informed exaggerations. Your assessment of his financial position is incorrect.’

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