Council plans to borrow money to invest £18.8million in high street property are too costly – and might not even yield returns, opposition councillors have claimed.

Lib Dem-run St Albans District Council is planning to buy up shops, offices and flats in Harpenden High Street.

The council says the investment – which is expected to fetch the council an extra £90,000 a year - will help it balance the books and play a part in shaping the area.

Approximately 107 per cent of the cost of the purchase will be funded through borrowing, with the extra seven per cent coming from fees.

But Tory and independent councillors are fighting the decision and want it removed from the district council’s budget.

They claim the council will be paying millions of pounds more than what the high street estate is worth.

They also raised doubts over the future of high street shops: “Retail occupancy and rents are coming under increasing pressure due to changes in shopping habits and the growth of internet shopping.

“Currently, the Harpenden site is ‘well let’, ie. it is nearly fully occupied at a good rent level. There is limited opportunity to protect against a falling market.

“The Liberal Democrats say this speculative deal is needed to ‘plug’ the budget gaps that have arisen since they took over the Council. However, it is likely to make them worse. The net return is currently reported to be £90,000. If units fall empty or rents start to fall, this tiny return could easily turn into a loss.”

But cabinet member Cllr Robert Donald, who is responsible for commercial and development, said claims that the value of the properties is lower than £18.8million is “ridiculous”.

He added: "Income from the Harpenden Estate has gone up 20 percent since 2016, that is a large increase and you would expect the capital valuation to go up in proportion to this.

"Retailers in the estate have performed far better than the average for this sector since the 2008 recession and have bucked the national trend.

"Given the improvements in the Harpenden retailing, property and commercial markets since 2016 you would expect the valuation to increase.

"The council has carried out two independent professional valuations within six months and both have produced the same purchase price."

He said the only reason the council is purchasing the property is to help the council's future budget gap to make up for cuts in government funding.

He denies opposition councillors’ claims that the council would offer retailers reduced rents, saying: "If the country now experiences another economic recession we won’t want to lose retailers so we will do what we can to help them practically and financially through this period by acting as supportive landlords."