Home Office poised to lose £1.5m on Blunkett's house

It has been standing empty and deteriorating since former home secretary David Blunkett left it 18 months ago.

But now the six-bedroom Belgravia house, which Mr Blunkett was allowed to occupy long after his forced resignation, is finally being sold - in secret - by the Home Office.

Experts say that had it been sold before the credit crunch it could have fetched as much as £5 million. Now, however, it may go for no more than £3.5 million.

The house, in South Eaton Place, near Sloane Square, is pictured in the London Magazine, which is published by the Central London Estate Agents body.

But it does not appear on the website of agents Savills or on Primelocation and the Home Office does not appear to be encouraging publicity. It is described only as a "development opportunity in Belgravia", South Eaton Place, and advertised as "price on application".

This suggests that its condition is poor and that the property would require refurbishment - enough to put off most private buyers Neighbours confirmed the property's poor condition, and complained that it had been neglected by the Home Office.

The house has an entrance hall, three reception rooms, six bedrooms (but only two bathrooms/shower rooms), three fitted kitchens, utility room and parking.There are also five offices/store rooms, workshop, garage, boiler room and cloakroom/WC.

The total size is 4,522 sq ft, which means that, in good condition, it could fetch £6 million even in today's market. Mr Blunkett was forced to resign from the Cabinet in early 2005 following the revelations of his affair with Kimberly Quinn and his involvement with a visa application for her nanny. But Tony Blair allowed him to stay in the house although he has a home in Wandsworth he was letting out.

Before him, the "grace and favour" house was used by other home secretaries and it has bullet-proof windows and CCTV.

In 2006 Gordon Brown decided to sell it - but the costly delay until now will make the Home Office the second public body to lose heavily in the housing market plunge.

Transport for London has been trying to sell the house it bought for disgraced Transport Commissioner Bob Kiley for exactly a year. The house, not far from the former Blunkett residence, was bought in December 2002 for £2.1 million and was put on the market at £4.95 million. A year on, the price has been reduced to £3.5 million.