AN entrepreneurial couple has brought a derelict town hall back to life thanks to expert advice on how to use their pensions to invest in the listed building.
Newburn Town Hall is once again brimming with business, culture and community life after Newcastle Chartered Financial Advisors, Laurus Associates helped David and Elaine Milbourne not only purchase the empty building, but also fund the full restoration of its historic features.
Through careful planning and financial advice, the mixed-use hall now provides a residential home for the couple as well as commercial space for Elaine Milbourne’s Performing Arts School (EMPAS), David’s marketing firm, Freshh Creative, and the Tappuccino Café.
The project, which took four years to complete due to planning processes, and was featured on BBC’s Britain’s Empty Homes in 2014, would not have been possible without using their combined pensions as the source of funding.
Although there are many rules around buying and holding commercial property in Self-Invested Personal Pensions (SIPPs), Laurus Associates director Colin Dawson believes there are increasing numbers of non-traditional properties being purchased using pension funds in the North East as a means of long term investment.
Colin said: “David and Elaine’s town hall project is a prime example of what can be achieved to produce commercial, personal and wider community benefits. I hope it helps generate more awareness amongst corporate companies and individuals into the investment opportunities available in North East commercial property using SIPPs.
“With pension property purchases, individuals can buy business premises using their pensions, lease it back to the business and then use the quarterly rent paid to top up their pensions, which must be done using a SIPP. This allows investors to own commercial property in a tax efficient manner as well as the ability to borrow up to 50% of the unencumbered pension fund, if necessary.”
Less than six months since re-opening the doors, David and Elaine Milbourne are starting to reap the benefits of investing in the mixed-use commercial and residential property.
Freshh Creative director David Milbourne said: “With over 420 metres squared commercial space, our businesses have greater scope for growth, including job creation, flexibility in the use of space and increased profitability. This has helped us to forecast turnover increases of up to 15% for the coming year, which we are already starting to realise.
“Helping service the community has been the most rewarding part of the project for us, and Elaine has been able to introduce a wider prospectus of classes to her performing arts school including Adult Tap Dancing, Iyengar Yoga, Pilates, Arts and Craft and Fitness classes. We also have plans to include a community choir, mobility classes and baby massage in the future.
“From a personal perspective, we now live in a beautiful, Grade II listed home that sits on the same site as our work ventures, and our businesses pay regular rent instalments back into our pension.”
With over 20 years experience in pension property purchases Laurus Associates director Karen Barwick advises: “As with any investment, there are benefits and risks which people must be aware of, especially if the property represents the main assets of the SIPP. Plus, with various costs involved in this investment type it is always best to seek expert financial advice.”
Karen concludes: “The growing trend in commercial property investment using SIPPs in the region should be highly beneficial to the business landscape. This approach could aid urban regeneration and economic growth, as we have already clearly seen happening with David and Elaine’s town hall restoration.”