Pub property agents see rise in leasehold deals

Fleurets director Bob Whittle said that he is seeing more leasehold pub sales compared to last year.

“Due to the limitations of bank funding I am finding that some people — a small percentage — are now looking to take a lease because they can’t get the funding for a freehold,” he said. “People have £50,000 or £100,000, but can’t borrow anymore for a freehold so are taking an interest in leaseholds. We are seeing more interest in leasehold properties than last year.

“The majority of freehold sales are to self-funded buyers — those who have family funds or have cashed in other investments.

“I think the trend will probably continue this year because I can’t see any movement from banks in terms of improving their services to small businesses.

“If the banks start lending more generously then it will have a positive effect on the property market.”

Paul Davey of DDC Davey Co added: “The volume of premium leasehold sales has outstripped freehold transactions for some time and we believe this trend will continue to be a strong feature of the market in 2013.”

He also pointed to bank lending criteria. “The principal reasons are affordability, governed principally by the lending policies of the banks, and price expectations from freehold sellers,” said Davey.

Christie+Co’s director and head of pubs, Neil Morgan, said: “I would suspect people are opting for leaseholds on the basis that lending is still very tight with banks.”

He reiterated that he thinks the relationship between pub companies and tenants is improving so there are more people going towards tenanted pubs too.