Mark Brown, a real estate partner at Freeths, takes a look at changes to the assets of community value (ACV) regime
Recent years have been challenging for the pub and brewery industry in England. Many operators face difficult decisions, including whether they can generate vital cash by selling property that is no longer economically viable.
Since 2011, owners have faced restrictions on selling assets that further the social wellbeing or social interests of the local community. The Community Right to Bid allows community interest groups to register any building or other land that furthers the social wellbeing or social interests of the local community as an asset of community value.
If the owner of an ACV wants to sell, the community interest group that registered it has six weeks to express an interest in buying. If the community group does express an interest, the six-week moratorium extends to six months in total, although the owner of the ACV can still sell the asset to whoever they want once that period is up.
These community rights will be strengthened by The English Devolution and Community Empowerment Act, which received Royal Assent in April this year. Under the Act, the six-month moratorium period will extend to 12 months and the community interest group will have a right of first refusal. This is potentially a significant shift.
The Act will also widen the assets that can be registered as ACVs. Assets that further the economic wellbeing and interests of a community will be eligible, as well as those that further social wellbeing and interests.
This means that a pub that is struggling as a going concern could qualify for listing as an ACV if it’s economically significant to the surrounding area. This could have significant implications for regional breweries and large pub-owning businesses in particular.
Currently, operators may choose to sell pubs that are underperforming or are no longer viable as licensed premises, to fund investment elsewhere. The new Act makes that process more uncertain, potentially significantly longer, and more legally complex.
The Act also introduces a new class of ACV: sporting ACVs. Most ACVs are listed for five years, but sporting assets will be a distinct class and remain on the list indefinitely. The practical implications of these changes are significant. A pub with a bowling green may find that the bowling green can be listed as an ACV independent of the pub, and gain indefinite protection. The same logic could apply to pubs with sporting facilities, such as skittle alleys or pétanque terrains, and to golf course clubhouses and other sports and social clubs.
Many of the assets that communities fight hardest to protect are failing, not because no-one cares, but because the economics no longer work. Communities are often asset rich, but cash poor.
The incoming regime will improve community groups’ legal position, but not their financial position. The main route community groups had to secure funding, the Community Ownership Fund, closed in January 2025, and no replacement funding has been announced. If the government doesn’t replace that funding, it will be criticised for giving community groups more rights on paper without making it possible for them to exercise those rights in practice.
We don’t know when the new ACV regime will come into force, but it would make sense for the government to announce funding, either before or at the same time as introducing the new ACV regime. Commencement could, therefore, be further in the future than some in the sector think. If the government does introduce new funding, expect the right of first refusal to bite in a number of cases.
There are now at least 278 community-operated pubs in England, and CAMRA is preparing to take advantage of the changes by giving local branches tools to improve their ACV nominations. CAMRA has also re-established the All Party Parliamentary Group on Pubs. Stronger legislation, better nominations, and sustained political pressure all arriving together will reduce owners’ options.
Owners and estate managers of breweries with land, pubs, or taprooms that might be covered by the ACV regime should act now. Look at assets that are already registered and any that might be nominated in the future. Are you equipped to challenge these robustly? Do you know your local authority’s approach to ACVs and how best to engage with them? Are there assets you may want to dispose of in the near future that you should consider selling now?
The right of first refusal is likely to have a negative impact on the price of listed assets and potential buyers’ interest.
