Davison has secured the freehold of the Fox & Hounds in Peasemore, Berkshire for £326,000, and is spending a further £100,000 on a refurbishment.
It will reopen as the Fox at Peasemore in March.
The PM’s mother still lives in the village and his brother, who visits the pub occasionally, is chairman of the parish council.
Davison said: “Having been in a tenancy for 16 years, it was becoming harder and harder to make a profit, and what we were putting into the business wasn’t going to return any long-term capital for us.
“We’d had our eye on this pub for a couple of years and it went into receivership,” he added. “The previous occupants didn’t want to be here, but the residents of Peasemore really seem to want the pub.”
Davison said he’d had a few requests for finance rejected last year before local MP Richard Benyon intervened and wrote a letter to the chief executive of Lloyds.
“He explained that the banks couldn’t carry on ignoring the pub sector and tarnishing it with the same old brush,” said Davison.
He left his previous pub, the Sun in the Wood in Ashmore Green, Berkshire, earlier this month where he was a Wadworth tenant.