THE AGENTS

In recent months, we have seen many new leasehold pubs coming onto the market. This sector tends to attract either first-time buyers or experienced licensees who have worked as managers and are looking to take on their own business.

With the increase in supply, it is essential that buyers prepare their businesses correctly for sale because a far wider choice is available.

Sellers who have up-to-date accounts, VAT returns and copies of leases and who have kept their property in good order will always sell their pub first.

As agents, we advise that those who have been in a business for more than 12 months must have their accounts prepared ready for sale, together with copies of their latest VAT returns. For those who have been in the trade longer, the more accounts available the better.

Sellers should also inform their landlord that they are instructing agents to market their business.

In most cases, the landlord will prepare a schedule of dilapidations for the outgoing tenant, to ensure that the property is brought up to a good standard of repair and decoration before the sale completes.

We are often asked how long it takes to sell a leasehold business. This varies but, on average, the period of time from the agreement of a sale to completion, has increased from six to eight weeks and is now eight to 12 weeks.

Buyers also need to be prepared and well-informed when buying a leasehold pub. They need a personal licence and once they have found their pub, they also need to prepare a business plan, provide references and proof of funds. Most pub companies will not interview buyers without this.

Buyers should always allow for costs over and above the purchase price.

We suggest 25%/30% of the purchase price should be added to cover legal fees, survey and valuation, rent deposit and working capital etc.

The market has changed dramatically over the last 12 months and now favours buyers. Therefore sellers need to ensure that their business is well groomed for sale.