What is really going on in politics? Get our daily email briefing straight to your inbox Sign up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Chancellor George Osborne has made a fortune by secretly flogging his second home which the taxpayer helped pay for.

Neighbours say the top Tory has made about £450,000 profit from the sale of the Cheshire farmhouse.

The bumper payday for Mr Osborne is mainly thanks to public cash used to pay interest on monthly payments for the exclusive property.

News of the deal comes as the Chancellor and David Cameron face a Tory backlash over the huge sums they are making renting out their London homes while living in Downing Street.

Mr Osborne bought Harrop Fold Farm, near Macclesfield for £445,000 in 2000.

Using his Commons allowances, he was claiming up to £1,900 a month in interest payments on the mortgage.

He then tried to rent the property before managing to sell it, without it going on the open market, for up to £900,000 this year.

Taxpayer-funded home loans were banned under a new Commons expenses system brought in to restore public trust in politics after the 2009 expenses scandal.

MPs were given until this summer to stop claiming but those who carried on after the election in 2010 have to pay a slice of the profit back to the Parliamentary authorities.

But because Mr Osborne stopped claiming expenses after the election he does not have to pay a penny back to the Parliamentary authorities.

Labour MP John Mann said it showed Mr Osborne was “unfit to govern”, adding: “People across the country have been forced to bear the brunt of his economic failures and brutal cuts. They will be disgusted by George Osborne’s greed.”

Mr Osborne bought the second home a year before he was elected MP for Tatton in 2001.

He quietly sold it in January when it looked like Government plans to change constituency boundaries meant he could lose the seat.

The MP had been expected to flee for a Tory constituency like Kensington and Chelsea before the Liberal Democrats scuppered the boundary shake-up.

He made the decision to sell in Cheshire because the demands of his job meant he was spending much less time in the constituency, allies insisted.

A neighbour at the sprawling complex, which includes several other houses, revealed that Mr Osborne had planned to let it out but a local couple made an offer.

The neighbour said: “He was going to rent it because he didn’t want it going on the open market. Fortunately for him these two people are local.

“They have always admired it and wanted to rent it but George wanted to sell. So they managed to buy it without it going on the market.

“I don’t think George has bought another house in the constituency. He had the house here and now he’s sold it.

"It would fetch between £800,000 and £900,000.”

Mr Osborne was caught over-claiming for the property before the last election.

He was ordered to repay £1,666 after Westminster’s sleaze watchdog found he had breached the rules by saddling taxpayers for a £450,000 mortgage on the house that cost £5,000 less.

The Tory, who has a trust fund worth an estimated £4million, originally bought the property by extending the mortgage on his London home.

He took out the loan on the Cheshire property and started billing taxpayers after he was elected the following year.

He breached his second home expenses limit with a series of claims that included a £121 bill for servicing his posh Aga stove.

This took him over the then limit of £24,006.