Southwark Council expects its purchase of the freehold of its headquarters in Tooley Street to save at least £1.5 million a year, the authority has revealed.
The council signed a 25-year lease on the building in 2008 and moved in the following year as part of a programme to sell off some of its older properties.
But last month its cabinet agreed to buy the building outright after the property was placed on the market.
The authority did not reveal the purchase price of the building, but said it expected to make savings of “at least £68 million over the next 20 years”, which would result in a minimum saving of £1.5 million during 2013-14 comparing its loan repayments with the £7.7 million in rent that it would have paid.
It added that owning the building would allow it to sublet parts of the building that were surplus to its requirements on a penalty-free basis, something that would not have been possible under the terms of its current lease.
Council leader Peter John said the decision of the building’s owners had presented the authority with “a unique opportunity” to save money with prudential borrowing.
“The choice we had was the same as someone renting their home being offered the opportunity to buy it for a mortgage that costs less each month than the rent,” he said.
“The money we will save will go directly in to where local people have told us they want it spent - their front line services.
“Now we have bought the building it will both reduce its annual costs in these difficult financial times and [mean that we have] gained ownership of an important asset for future generations of the people of the borough.
“Owning the building also increases the flexibility we have in how we use it, both for the community and in terms of subletting to other organisations and is a massive boost to Southwark and central London.”
It has become Southwark council leader Peter John's mantra: "This is the best borough, in the best city, in the best country in the…