Leasehold market shows its strength

Property agents agree that the success of Christie+Co and Punch Taverns' recent letting campaign shows the strength of the leasehold market. The agent transferred 650 ex-Spirit Group Punch Taverns leases over the last 18 months.

Colin Wellstead of Chris-tie+Co said: "It's been a difficult summer, but you don't buy a pub thinking about the next two months. Most people will be planning on being there for 10 years, and the vast majority no less than three."

He added: "It's an attractive business to get into. There's a lot of scaremongering and criticism of pubcos, but the vast majority of licensees make a go of it and develop a successful business."

He went on to explain that leaseholds are potentially more attractive than

freeholds because the all-in fee for taking on a good lease could be as little as £75,000, whereas entry to the lower end of the freehold market is between £300,000 and £500,000, and £1m freeholds are becoming increasingly common.

Barry Gillham of Fleurets said: "It shows that plenty of people want leasehold pubs. You've got to work hard, but the rate of return is one of the best around. Prices in the housing market have risen rapidly over the past few years, but pub leases have remained the same, making them very affordable. People have a large amount of equity after selling their house and can easily afford the average price for a leasehold."

He added: "It comes as a bit of a surprise that the leasehold market is holding up so well against the gloom of the smoking ban, no football and the recent bad weather."