With share prices in freefall, people's houses seem like the

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Freehold pub property prices seem much more locked into the dull realities of return of capital criteria. So, a pub is still selling for about 1.5...

Freehold pub property prices seem much more locked into the dull realities of return of capital criteria. So, a pub is still selling for about 1.5 times its turnover or a modest five or six multiple of its net profit. After all, people might gear up to afford a house with an extra room in Clerkenwell, but the bank manager will have a say on whether your pub purchase in Pontefract is a pipe dream or a pragmatic profit-and-loss performer. However, housing booms always create distortions. There are buyers in the market, flush with ready cash after a house sale in the south-east, who are happy to pay top pound for a roses-round-the door pub in the Lake District. That over-priced but pretty pub may look expensive to the property scrutineers at Punch but, hey, what price on quality-of-life after years of trying to stay alive on the M25? And a pub value in deepest Chelsea is bound to be affected by the latest round of South Sea Bubble-type house price madness in the capital. But pub freeholds prices, at least, are underpinned by the absolute value of bricks and mortar. More volatile, of course, are leasehold values. A value of a lease is much more directly linked to the profit that can be made at a given site. Who in their right mind would take on an expensive lease making no money? And with profits on the slide at those high-rent high street sites, value and sale prospects both head in the same direction. And we're not talking north. Go on, make me an offer. Please. PC

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