Average freehold price tops £600,000

The average price of a freehold pub has topped £600,000 for the first time, according to the latest sales statistics from property agent Fleurets.

In its annual Survey of Prices: Hotels, Restaurant, Pubs & Leisure, the agent looks at its sales over a 12-month period from October 1, 2004 to September 30, 2005.

Fleurets said that it has sold freehouse pubs for an average of £612,000 nationwide - an increase of 12.6 per cent on the previous year and 56 per cent over the past two years.

These freehold pubs are becoming a diminishing part of the market, as the pubcos have been strong buyers over past three years and sellers have dropped, it stated.

The best value place to buy a freehouse was in the North West and the Midlands.

The lowest price for a free- house pub is in the East and North but average prices were still between £370,000 and £420,000.

Inevitably with the price of freeholds so high, leases are by far the biggest market for pub transactions.

The value of leaseholds for assignment reached £86,363, showing a steady increase from an average price in 2004 of £72,966 and £91,795 in 2003.

Bottom-end disposals have sold for "big prices" in 2005, reported the agent - the average price has virtually doubled over the past two years.

"It is thought that the pubcos have woken up to the fact that there are some gold nuggets in their estates and disposals have been made - even of quite good pubs - where alternative use values are even higher," it stated.