Community right-to-buy could 'devastate' pub market
The government's 'right-to-buy' proposals for communities looking to acquire their local pub could have a devastating impact on the pub market.
Reflecting on an "extremely difficult" year for pub owners in the South West of England, John Kinsey, leisure partner at property consultants King Sturge, said ministers' plans could have huge significance for the region.
The community right-to-buy measure is intended to give local groups the legal right to nominate buildings, including shops and pubs, as an asset and have it included on a list compiled by the local authority.
Under the plans if a listed asset goes on the open market its sale will be delayed to give community groups the opportunity to prepare their business plans and raise the funds they need to buy the asset for themselves.
But Kinsey said this would place unnecessary pressure on those looking to dispose of a property.
"What this will mean in practice is that anyone trying to sell a business which is deemed to be a 'community asset', such as a village pub, will first have to wait up to six months while the local people decide whether or not they want to buy it for themselves," he said.
"Don't get me wrong, I'm a firm supporter of retaining and protecting community pubs, but this scheme in its present incarnation will just hold things up in a sector that is already suffering terribly.
"I believe villagers should be given the right to buy their village pub, but only once the pub is actually closed for business, not before it has even gone on the open market."
Meanwhile Kinsey predicted that conditions would be extremely tough for the sector this year.
"The common view is that values in the pub business have fallen since their 2008 peak," he said, "the leasehold market is difficult in Devon and Cornwall, mainly due to the completely risk-adverse nature of the banks and subsequent lack of finance."
He added: "In fact it would be no exaggeration to say I could count on the fingers of one hand how many deals were financed by the banks in 2010."
Another factor on the horizon which Mr Kinsey believes has huge implications for the region's pub businesses is the so-called "community right to buy" or "community assets" scheme which the government is currently consulting on.
Turning to the corporate market Kinsey argued the outlook was relatively bright, with many big-name players either securing or seeking to secure new premises in the region.
"At the end of the day we're in the West Country and we will always have a healthy tourist trade bringing a constant flow of day trippers and holiday makers into Devon and Cornwall, providing our local economy with a near-constant flow of much-needed income and of course inward investment," he added.
