Our MPs are a property-savvy lot. Of the 650 representing the UK, just under one-third use property to boost their £65,738 salaries, collectively enhancing their incomes by a minimum of £1.3m a year.
After the 2009 expenses scandal, the current intake of MPs, elected in 2010, are under closer inspection than their predecessors. Gone are the days of claiming for 55p cups of Horlicks, cleaning moats or landscaping gardens.
In this parliament, property figures more prominently. The latest Register of MPs’ Financial Interests was published last month. An Estates Gazette analysis of the document shows that 200 MPs own and receive additional income from commercial, residential and agricultural property. This compares with just 140 MPs in the last parliament (2005-2010), who registered their interests back in 2005.
Under the rules, MPs have to declare property that is valued at 100% or more of their annual salary and any rental income that is worth 10% or more of their salary.
This means that those on the register are, at a bare minimum, boosting their incomes by £6,574 a year, or £541 a month. But a quick look at the property holdings listed suggests many are drawing an income from property well in excess of this.
The register shows a surprisingly diverse collection of portfolios, which include flats, property companies, farms, shops, offices, leisure operations and vacant land.
The MPs contacted by EG refused to discuss their investment strategies, saying they were “staunchly private matters”. One described any discussion around financial interests as “potentially toxic”.
EG trawled through the register to pick out members who are most heavily invested in property.
Most MPs’ interests lie in residential property and London is by far the most favoured location, with 35% of our property-owning MPs earning rental income through one or more house in the capital.
In the rest of the country, several MPs have significant residential property portfolios. Hertsmere’s MP, Conservative James Clappison, owns a portfolio of 26 houses in East Yorkshire. Harrow East MP Bob Blackman, a fellow Tory, jointly owns six buy-to-let homes in Welwyn Garden City, Hertfordshire, and Watford MP Richard Harrington, also a Conservative, jointly owns five.
Nick Jopling, executive director, property at Grainger and a parliamentary candidate himself in the 1997 election, says the level of investment shows the confidence MPs have in the UK residential market. “It gives MPs first-hand experience of what it takes to be a responsible landlord and that’s a positive thing,” he says.
Jopling adds that property ownership also gives MPs a real insight into the way the market works, including the demand for rental accommodation.
Liam Bailey, director at Knight Frank, says the very nature of many MPs’ roles, having a base in their constituency and another near parliament, encourages multiple property ownership. “Once people get familiar [with buying property], they are encouraged to consider multiple purchases,” he says.
Bailey points out that MPs, as a group with access to equity, reflect the growing trend seen in the market over the past decade, with the “property ownership world” becoming more concentrated while increasing numbers turn to the private rented sector.
Commercial property
MPs have fewer holdings in commercial property, with just 25 registering an interest in shops, offices and industrial property.
These range from a commercial business park in East Anglia to children’s entertainment centres in Ukraine and a commercial property in Munich.
Liz Peace, chief executive of the British Property Federation, says it should come as no surprise that many MPs invest in property. “As an investment class, it has performed well over the medium to longer term and so it is a natural place for the relatively wealthy to put their money,” she says.
Peace says she sees the trend as positive, because owning and managing property will help to increase MPs’ understanding of the issues in the sector. “This is particularly true in respect of commercial property, a business that regrettably few MPs have direct experience of and where educating parliamentarians can feel like a never-ending task,” she adds.
