Holding steady

With its array of traditional market towns, historic architecture and excellent climate, East Anglia is a popular place to run a pub. But with the smoking ban now in full swing, how is the pub property market shaping up? Is there still the demand despite the uncertainty over trading conditions?

Steve Tucker, director of agents Humberstones in Norwich, suggests that some sellers are waiting to see the effects of the ban before placing their pub on the market, with some delaying until next spring.

This feeling is echoed by Bob Whittle, a director at Fleurets, although he claims there could be another factor at play. "The market is generally buoyant, although the steady rise in interest rates over the past 12 months has led to an air of increased caution," he says.

Is it a good time to sell? ​

Tucker says that now is as "good a time as any" for sellers, "providing they accept that values may not be what they were two years ago". He adds: "There is still a shortage of freehold properties and there is some evidence of a little cooling off where the outlet is one that will not appeal to the large pubcos.

"For the rest of the year and next, buyers will continue to find a ready supply of properties with the chance of a few lease bargains due to business failures caused by factors other than the smoking ban."

When it comes to buyers, Bill Colquhoun, director of Christie + Co's Ipswich office, says the mood is as upbeat - if not better - since the smoking ban came into effect.

He adds: "We are experiencing high ongoing demand from pub buyers throughout our region as private individuals, multiple operators and national pub companies continue to compete for freehouses ranging from closed pubs to top-end high trading pubs, inns and restaurants."

Overall, agents remain positive about the prospects in the region. "East Anglia will continue to be very sought-after by individuals and pubcos due largely to the general prosperity of the area," says Tucker. "Lease assignments will continue to account for the majority of sales with 'free of tie' status attracting the most interest."

Future prospects​

However, Whittle says the future depends on a number of other factors. "If the cost of borrowing continues to increase then this will impact on the residential market which in turn will reduce the demand for freehold pub, hotel and restaurant opportunities," he says.

"In contrast, the leasehold pub market will not be as badly affected. As long as the vendors ask sensible and reasonable prices then the sales of leasehold pubs by way of assignment will continue as many leasehold pub purchasers actually borrow against equity in their private homes."

A residential slowdown will therefore not have the same effect on the leasehold pub market.

Whittle adds: "If the cost of borrowing remains constant, or even falls a couple of points, the freehold pub market is likely to remain just as buoyant as it is at the moment.

"This is mainly due to the shortage of freehold opportunities becoming available."

So, as with the rest of the country, it is freeholds that are seen as rich pickings in the post-smoking ban world.

But for the eagle-eyed buyers there could be a bargain available.