B&NES Council is writing off a £606,000 loan to its housing company Aequus and selling 9 and 10 Wellington Buildings. The two listed houses were losing money.

Bath and North East Somerset Council is taking two Bath houses back from its own housing company and selling them. It will write off a £606,000 loan it made to the company for them.

The houses are 9 and 10 Wellington Buildings. Councillor Mark Elliott, Cabinet Member for Resources, approved the plan on 4 November (decision 2534). It takes effect on 12 November unless councillors call it in.

Why the houses are being sold

The council transferred both houses to Aequus in February 2019, to let at market rents. Aequus is owned by the council through Aequus Group Holdings, according to Companies House.

A review of Aequus’s portfolio found the two houses lose money. The report says this is because of “their high level of borrowing” (report).

There is a second problem. The houses are listed, and a planning enforcement notice has been served on the council itself, as the freeholder. It concerns work the council carried out before it handed them to Aequus in 2019.

The money

Amount
Loan to Aequus written off £606,000
Repairs to meet listed building requirements £200,000
Total cost £806,000
Expected from selling both houses £806,000

The council expects the sale to cover the write-off and the repairs exactly. The sale figure is an estimate of market value, after conveyancing costs. The repair figure is the top of the estimates, with contingency included. Any money left over is to be ring-fenced for affordable housing.

Why not keep them for housing?

The council looked at using the houses for affordable housing, temporary accommodation or supported housing. It ruled all three out, citing the layout, poor thermal efficiency and “poor financial metrics”.

One house is empty and will stay empty for the repairs. The other has a tenant. The report says possession will be sought “within a timeframe agreed, where possible with the occupier and Aequus.”

What it means for you

  • For council tax payers: the council expects no net cost, as long as the houses sell for the estimate. The report does not say what happens if they sell for less.
  • For the wider budget: the decision lands as the council works out how to close a £14.8 million gap in next year’s budget.