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The Guv'nor: Property developers buying all the pubs

By Tony Leonard

- Last updated on GMT

The Guv'nor: Property developers buying all the pubs

Related tags: Public house, Tavern, Developer

This week, the only pub in a nearby village will be sold at auction to the highest bidder, widely expected to be a property developer.

With the knock of a hammer, hundreds of years of history, a heart of a community, will be wiped out. The villagers had looked into buying it but the asking price was too high to make it viable.

So it will probably be replaced by holiday homes for rich Londoners.

Another nearby pub has recently been sold to a developer and will be turned into luxury housing. Another met the same fate last year. As property prices in the south-east soar, the sad truth is that our pubs, no matter how successful, are worth more as development sites than as ongoing businesses.

When we bought the Snowdrop Inn from Punch Taverns in 2009, the pub industry was in economic crisis and we were in the middle of a property slump. We bought it for under £305,000, considerably less than half the price that Punch had paid eight years before. A couple of years of hard work, imagination and a great deal of goodwill and the pub turned over £1m and provided employment to more than 20 people.

Investment

Two years ago, a three-bedroom, terraced house opposite sold for well over £500,000. A developer could build three similarly sized properties on the Snowdrop’s footprint.

Our worst business decision (although we don’t regret it) has been to build a successful business rather than fail and knock it down!

When we tried to buy our other pub, the Roebuck Inn in Laughton, we were only able to raise in funding what the pub was worth as a business and so were easily outbid by a developer. We believed that was the end of the story until a lady from the village approached us and asked if we would be interested in taking a lease from her, the Roebuck’s new owner. She bought it to ensure that it remained a pub.

We pay a rent that is sustainable, the owner has invested in the building and we have a very good relationship.

She has been keen to see the business prosper and does everything to make that happen. She does not expect a major return on her investment soon.

Unfortunately, such community-minded ‘angels’ with the financial means to make such a commitment are very few and far between. The contribution that a well-run local makes to the social, economic and cohesive wellbeing of small communities can’t be overstated. Unfortunately, as long as there is so much more money to be made from destroying pubs than from saving them, country pubs are always at risk.

Related topics: Other operators

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