Urban pubs targeted by developers for conversion
Recent sales of pubs in the London area suggest the redevelopment of licensed premises for use as housing continues to grow.
Even requirements over the use of converted buildings for "affordable housing" are not deterring developers, says property agent AG&G.
Under the current system London Borough Councils set a certain quota of affordable housing they expect for new developments. Despite this, AG&G argues that property developers are still generating significant profits through purchasing pubs and transforming them into residential premises. The agent also estimates that up to 80 per cent of interest in pubs with the potential for such conversion to alternative use is from building firms.
James Grimes, director of AG&G, argues that although the closure of a "local" pub may be unpopular with a small amount of regular customers, nearby residents are often pleased when failing pubs - particularly those with poor reputations for community relations - are put to good use, for example providing housing for nurses or teachers.
Mr Grimes claims this is a predominantly urban phenomenon, as rural premises can restrict a developer's options, owing to listed status or planning limitations. Competition between developers who are fighting over premises has inflated prices. However, he also argued that this would not hamper those entering the pub trade, as developers are not interested in competing for pubs that are trading successfully.
For example, pub companies such as Fuller's had demonstrated recently that they were more than capable of competitively bidding for new premises, said Mr Grimes. West London in particular has seen interesting deals, he said.
The Queen's Head in Heston, Middlesex, was sold for just under £1.7m to a housing association development, and the White Hart in Greenford, Middlesex sold for just under £1.4m to developers.
The Duke of Wellington in High Beach, Essex, was also sold to a local developer, for £725,000 - £25,000 over the asking price.
