Friday night at the Star was just like any other night; the pub closed without fanfare. No announcements were made other than the usual calls for last orders. The regulars said goodbye, but expected to be back soon.
But Mary Maguire, the pub landlady, knew that this would be her last night in the pub. After the doors were locked, she packed her bags and fled. To where? No one knows, and she has never been heard from again. What we do know is that she left in a hurry after the owner of the freehold paid her £275,000 to surrender her lease.
When bar staff arrived at work on Saturday morning they found the pub locked up; no one had told them they no longer had a job.
Planning for Pubs
The Star had fallen victim to the UK’s overheated housing market. Land becomes much more valuable when it can be used for luxury housing instead of being used for a pub.
Nationally, about half of pubs sold over the last five years have been converted into some other use; 21 net closures a week.
In London there is a particular pressure given the white heat of the property market. According to the Campaign for Real Ale Regional Director Geoff Strawbridge,
London has lost a quarter of its pubs in the last ten years and one reason is that their sites tend to be so much more valuable to their owners in any other use.
The Star – St John’s Wood
The Star is on the corner of St John’s Wood Terrace, a desirable high street lined in the Heart of St John’s Wood, minutes away from Regent’s Park and Lord’s Cricket Ground. It is one of London’s most desirable areas and property prices have moved into the obscene range. According to Zoopla, the average price paid for a home in the NW8 postcode at the time of writing is £1.6m. A three-bedroom terraced house in the area will set you back around £3m.
In 2013, a property developer called Marcus Cooper had bought the freehold of the Star pub for £2.1m through a company called West End Investments Ltd. He then applied for planning permission to turn the pub into a single luxury home, including a games room, cinema room and gym. A campaign was launched to save the Star and Marcus Cooper withdrew his application in 2014.
Asset of community value
However, having lost the battle, Marcus Cooper was not going away, and the fight to save the Star continued.
Over a number of years, governments have tried to introduce legislation to allow communities to protect their pubs. One tool is the Asset of Community Value, introduced under the Localism Act in 2011.
Under the Act, communities can nominate which buildings are Assets of Community Value, and when the asset comes up for sale, they are given the chance to bid for it. Campaigners managed to persuade Westminster Council to list the Star as an Asset of Community Value in February 2015.
At the time that it was introduced, the government specifically had in mind that communities would protect pubs and local shops. The policy statement that accompanied the introduction of Assets of Community Value said:
Over the past decade communities have been losing local amenities and buildings of great importance to them – the village or housing estate shop or pub or community centre or village hall. On average nearly 300 pubs and 400 village shops have closed each year.
However, shortly after the Asset of Community Value legislation was introduced, developers started to find holes in it.
The most serious loophole is around land use. Under our laws, development is defined as a change in the use of land. Development usually requires permission, but certain changes of use are allowed without a landowner seeking planning permission. This includes changing the use of a pub to a shop or to another high street professional service like an estate agent.
Developers realised that if they could change the use of pubs listed as Assets of Community Value to other uses then this would undermine the original ACV designation. In short, whereas communities might be willing to fight to save a pub, they are rarely prepared to die in a ditch over their local estate agent.
Government ministers realised the problem and in January 2015 announced that they would change the law to prevent these kinds of change of use without planning permission being granted. The government in its announcement said that the changes would come into effect on 6 April 2015, just weeks before Mary Maguire’s sudden disappearance on the night of 20 March.
The Star becomes an Estate Agent
As customers started to arrive at the Star on Saturday they saw that representatives of the owner of the freehold, Marcus Cooper, had arrived with a new tenant, Gray Champion. Gray had worked for the Marcus Cooper group a decade earlier and was now keen to set up his own estate agency. Luckily for Gray, an opportunity had just opened up! Over the next couple of days, Gray moved in a desk and a computer into the seating area of the pub and boarded up the bar, ready for the grand opening of Champion Estates on Monday March 23rd.
But Westminster Council were suspicious. Was Gray Champion a bonafide estate agent, or was this a sham by Marcus Cooper to try and close down the Star before the government closed the very loophole he was trying to exploit? Planning enforcement officers from Westminster Council immediately visited the premises, and undertook several more visits over the following few weeks.
They came to the conclusion that Mr Champion was not in fact operating an estate agent by the April 6th deadline, and therefore any change of use would require planning permission. When West End Investments later applied for a certificate of lawful use, a document which would establish the building as being lawfully used as an estate agent, Westminster refused. In their view, the use of the building was unlawful.
The matter then went to a planning appeal as West End Investments sought to have the decision of the council overturned.
An estate agent, or an estate agent’s office?
The issues at the planning inquiry were so contentious that the evidence was taken under oath. The Planning Inspector, Suki Tamplin, warned the parties that a seven-year jail sentence could await anyone who lied. The key issue facing the planning inspector was whether Mr Champion had been operating an estate agent by April 6th 2015.
An estate agent falls into an A2 use category, which means a business which relies on providing services to visiting members of the public. It must be more than just an office. It must have some street presence. Westminster’s case at the planning inquiry was that if any change of use had occurred at all, it was to an office (B class) and not an estate agent. Change to B class required planning permission and none had been sought.
They say that a picture is worth a thousand words. Westminster Council took many pictures on their visits to Champion Estates. Here are just a few of them. We ask you, would you trust this estate agent with the sale of your home?
Consider the fact that the street which the Star was located on already had six estate agents on it; well-known brands like Savills, Foxtons and Winkworth with attractive displays, just meters away from the challenger, Champion Estates.
The early days for Champion Estates were rough. The locals, having lost their pub, were not being too kind to Gray. According to Mr Champion, the new offices of Champion Estates were vandalised on several occasions (although no police reports were filed).
They also stole his mail. The night before the inquiry opened, the Planning Inspectorate received a communication from an anonymous email address, which contained details of Champion Estates’ utility bills. It turned out that Gray’s business was not doing very well; Champion Estates had not been paying its bills.
It also didn’t have many customers. The records Mr Champion kept of activity at the business showed that in the first year, he was visited by around 90 members of the public, an average of 2 a week. In that period the records showed that only two instructions were received from members of the public, a figure which Mr Champion later revised to four.
That is, if those records could be trusted at all. Mr Champion told the inquiry that he compiled the records mostly from memory. At the inquiry that memory was shown to be somewhat unreliable. Having insisted that as a family man he had strict policy of not working on weekends or on bank holidays, the barrister for Westminster Council, Saria Sheikh, spotted that his activity log showed that he was was manning the office on Good Friday, Easter Monday and other Monday bank holidays.
Mr Champion was also away for long periods of time, a point which some locals chose to helpfully illustrate by posting fish through the letterbox when Champion Estates was closed. When Champion Estates was open, it seemed to open and close at somewhat irregular times.
When he was out of the office, potential customers would struggle to get hold of Champion Estates as the company had no answering machine in the early days.
Finally, there were the properties themselves. When he opened for business Mr Champion had 18 properties on the books. Most, if not all, were properties associated with the Marcus Cooper Group.
After hearing all the evidence, the Planning Inspector refused to grant the appeal and found that the refusal of Westminster to grant a certificate of lawful use was well founded. If Mr Champion was using the premises of the Star for anything in the period before April 6th, it was an office.
The Star has now gone back on the market to be let out. According to market sources, Marcus Cooper is seeking rent of £150,000 a year, which is more than twice the amount he was apparently seeking from Champion Estates. It is also at least twice the going rate for a pub tenancy, suggesting that prospective renters may have no desire to return the building to its former use. It seems that the struggle is far from over.
What should be done about the problem of developers attacking pubs? Geoff Strawbridge says far more protection is needed, and councils themselves can take action. Speaking about the issue in general, he told me:
Given London’s high residential property prices, the adoption of robust pub protection policies within local plans needs to be accompanied by action to remove the permitted development rights that have, since 2006, allowed owners to demolish pubs or convert them for example to coffee bars, estate agents or supermarket convenience stores without having to seek planning permission (typically once they have got the necessary permission, seldom refused, to turn the upper storeys into flats). Wandsworth has now issued 120 Article 4 Directions to bring such developments within planning control. Some other councils welcome nominations to give pubs Asset of Community Value status under the Localism Act 2011 which, since last year, similarly removes permitted development rights. But overall, developers have the advantage over local communities; they can afford to pay indebted pub companies much higher prices for pub sites than existing pub tenants or community groups can offer to keep their pubs open.
No doubt there are other cases like the Star across the country, but what is particularly disturbing about this case is the lengths a developer will go to build just one family home: a fight with the community spanning several years, the expense of appealing planning decisions (West End Investments had substantial legal representation at the appeal inquiry), not to mention the cost of paying off Mrs Maguire and creating the apparent ruse of an estate agent. This is the crazed greed provoked by London’s out of control property market. The tragedy is that if Marcus Cooper gets his way, a pub enjoyed by many will be turned into one house used by just a few.