Average freehold value hits £540,000

The average value of a freehouse in the UK has topped £500,000 for the first time, according to chartered surveyors Fleurets in its annual survey of licensed trade property prices.

Fleurets says free-trade pubs hit the £544,000 mark in the 12 months up to September ­ a massive increase of 39% on the previous year.

But leasehold values have slowed due to a steady supply of new leases from pub operators who have often not required a premium on the initial grant mainly because many houses needed major renovation work to bring them up to standard.

The average leasehold assignment value of £73,000 cannot accurately be compared to the previous year figure of £91,000 because of statistical reasons. However, this does show a rise of 8% on 2002 prices.

Average turnover of freehold pubs sold by Fleurets over the year increased from £272,000 to £299,000 and the average turnover of leasehold pubs was £280,000.

Fleurets has also revealed stagnation at the bottom end of the pub market where disposals were lower than at any time since enforced sales dictated by the 1989 Beer Orders took place up to 1992.

The sale price of theselower-end properties averaged £148,000, about £8,000 down on the previous year where, on average, turnover per outlet was just £110,000.

It says these pubs are often closed, boarded-up or vandalised properties and include private sales or those conducted by receivers.

Prices based on multiples of business turnover saw freehold values hit the 1.82-times average mark on freehold.

In the leasehold sector nationally, values dropped to 0.26 times turnover compared to 0.28 the previous year.