Saving a community pub

Assets of Community Value

The first and most widely used tool is an Asset of Community Value, or ACV, listing under the Localism Act 2011. A community group, such as a parish council or a properly constituted local organisation, can nominate a pub for listing on the basis that it furthers the social wellbeing or interests of the local community. Once a council lists the pub as an ACV, the listing brings two practical benefits: it is a material consideration that makes a change of use or demolition harder to win at planning, and it gives the community a window to act if the owner decides to sell.

This guide explains how communities save a pub and how finance can support them. It is not legal advice on the ACV process or on setting up a society, both of which need specialist input. Bodies such as the Plunkett Foundation and CAMRA publish detailed guidance and have supported many community pub projects, and a solicitor experienced in community ownership is worth engaging early.

The ACV regime gives communities standing they would not otherwise have. Without it, a pub can be sold and converted with little chance for local people to intervene. With an ACV listing in place, the community is recognised as having a real interest in the pub's future, which both strengthens the planning case against conversion and creates the breathing space the next tool depends on. Many successful community buy-outs began with an ACV listing secured well before the pub came up for sale.

The moratorium and the right to bid

When a pub listed as an ACV is put up for sale, the owner must in most cases notify the council, which can trigger a moratorium period during which the community has the right to express an interest and then to prepare a bid. The moratorium does not force the owner to sell to the community or at a particular price, but it does stop a quick sale and gives the community time to organise, raise capital and put together a credible offer. It is a right to bid, not a right of first refusal, but it is often the decisive window that makes a community purchase possible.

Community ownership through a benefit society

The usual vehicle for a community to buy and run a pub is a community benefit society, a form of co-operative structure registered with the Financial Conduct Authority as the registering body. The society is owned by its members, who each typically have one vote regardless of how much they invested, and it exists to benefit the community rather than to maximise private profit. Hundreds of pubs across the UK are now owned this way, run by their communities and kept open as the social heart of a village or neighbourhood.

The society can run the pub itself, employ a manager, or grant a lease to a tenant licensee while retaining ownership of the building. Each model has trade-offs in control, risk and the skills the committee needs, and the right answer depends on the community and the pub. What matters from a funding point of view is that the society is a proper legal entity that can own the freehold, raise capital from its members and, where needed, borrow against the asset, with a committee accountable to the membership.

Raising the money: shares, grants and loans

Community pub purchases are usually funded from three sources stacked together. The foundation is a community share offer, where local people and supporters buy withdrawable shares in the benefit society, putting in patient, community-minded capital that is not expected to deliver a commercial return. On top of that, grants and support have at times been available from government and charitable programmes aimed at community ownership, and bodies such as the Plunkett Foundation can point groups to current sources. Where these do not cover the full cost, a loan fills the gap.

The mix matters because a community pub still has to wash its face once it opens. The more of the cost met by shares and grants, the less the society needs to borrow and the lighter the burden on the trade. Where a loan is needed, it has to be comfortably serviceable from the pub's trading surplus, just like any commercial pub loan, so the business plan behind the rescue has to be realistic and not driven by sentiment alone.

How finance fits alongside community capital

Lending to a community benefit society to buy a pub is a specialist corner of pub finance. Some lenders, including those with a social or co-operative focus, understand the model and will lend against the freehold alongside the society's own share capital and grants, sized on the going-concern value and the trade much like any other pub loan. The committee should expect the same scrutiny of the business plan and the affordability as a commercial buyer, because the loan must be serviced from the pub's surplus.

We act for the society, not for any lender, and we package the case so that the community capital, any grants and the loan fit together into a structure that completes the purchase and is sustainable to carry. Because community deals turn on the strength of the share offer, the realism of the plan and the right lender, our role is to position the borrowing so it complements the community money rather than overwhelming the trade. A regulated owner-occupier case is referred to an authorised firm, but a society buying a pub as a trading business is unregulated commercial lending.