Public consultation - on Possible sale of flat above Bishampton Stores

Please read as this concerns all residents:

A proposal has been received from a resident, to sell the flat above the shop and use the proceeds to reduce the loans which supported the purchase of the Pub, Shop and Flat, saving a substantial amount in interest repayments.

As this entails selling a valuable community asset – council believe it is appropriate that the decision is taken to the community. Opinion is divided within council and we expect will be divided within the community, so IT IS IMPORTANT to make your opinion heard.

A Public meeting is being arranged for TUESDAY 26^th March at 7:30pm,  at the Bishampton Villages Hall.
Please try to attend as we want to understand everyone’s views.

In Brief - The case to sell.

• Penalties for early repayment are currently low due to interest rates, making this possible for the first time since the loans were taken out. This may not continue.
• Proceeds of sale should allow around £200,000 after costs, to be paid off the loans reducing both interest and outgoings.
• Interest over the remainder of the loans (fixed rate) would reduce from £65,105 to approx. £9,500, though interest is not the only saving. We estimate the overall saving in reduced payments following early repayment could be as much as £142,000.
• Against the gross rental of £8200 the flat currently incurs approximately £2000 per annum in costs on agents fees/insurance and maintenance costs (averaged) – if sold there would be no agency fees and the majority of the other costs would be passed onto the new owner by way of new service charge.
• It would reduce council and clerks time and work relating to managing one of the properties.
• Reduced debt would reduce our financial risk in the face of any future loss of tenants (particularly at the pub which has been the more volatile tenancy)
• In 2010 the then council would have preferred to buy the shop without the flat due to concern over affordability of a loan for the whole building (minutes 24/5/2010). 
  
   

The financial case is compelling however this course of action is not without some elements of elements of risk and longer term consequences highlighted below.

The case to retain ownership.

• Retaining the flat provides control and long term flexibility over use of the building as a whole. We cannot predict the needs of the shop or village in 20-30 years time.
• The flat is an appreciating asset and the rent forms an income stream (currently around £7,400pa net of agents fees), which will increase with rents and persist beyond the loan repayments.
• Renting the flat means we can require suitable occupancy through the tenancy and ensure this is not to the detriment of the shop or community. By selling we relinquish any control over subsequent purchasers or sub-letting – other than that which can be enforced through a 999 year leasehold agreement.
• Paul’s recent advertising of the shop business, showed that the possibility of rental accommodation makes the shop business significantly more appealing. [Our prospective shop tenants are interested when the existing tenancy ends]
  Having shop tenants in residence may enable more flexible opening hours.
• Some additional workload is inevitable through owning any property ownership. Though this is minimised for the flat by using managing agents.
• When at target levels, the rental incomes from the properties generate a small surplus over repayments to cover maintenance. For the first time post covid, incomes are approaching targets with a stable outlook, providing funds for maintenance and replenishing reserves, thus there is no current compelling need to sell this asset.
• We are now over half way through our loan repayments (the pub is due to complete in 2033 shop in 2035)

In Summary,
Selling provides a significant 10 year saving and increased resilience from possible new tenancy changes (particularly at the pub), whilst by continuing as we are we ensure the flat remains an option for shop tenants, keep full control over the whole building and retain a significant asset and an on-going future income stream. 
 
So have your say. We would like to see a strong turn out at the Public meeting allowing confidence that a decision on the matter truly reflects the will of the community - however we recognise not everyone will be able to attend in person (eg due to immobility) – please DO MAKE YOUR VIEWS KNOWN to Julie our clerk  (clerk-survey@BaTPC.org.uk or 07761 735 642).

or simply complete the form below

[TO REGISTER YOUR VIEW, WE DO NEED YOUR NAME AND ADDRESS (only for validation purposes)]

SURVEY IS NOW CLOSED.