Freehold pub prices up by a fifth due to ‘supply and demand’

By Nikkie Thatcher

- Last updated on GMT

Price fluctuations: the cost of a freehold pub 10 years ago was 18% less than what it is now
Price fluctuations: the cost of a freehold pub 10 years ago was 18% less than what it is now
The average cost of a freehold has risen by almost a fifth (18%) over the past 10 years, research from leisure property specialists has found.

According to Fleurets’ Survey of Pub Prices 2018​ found in 2008, the average price was £377,555, however, while there has been some fluctuation in prices over the past decade, the most recent figures reflecting 2018 was an average price of £445,537. This is an increase of £67,982 – up 18%.

Fleurets director Simon Hall outlined the reasons in the price fluctuations in the market over the past decade.

Lack of confidence

He said: “There are several reasons why the average price of pubs has changed since 2008 but the main reason comes down to supply and demand.

“In 2009, following the credit crunch, the big tenanted pub companies put hundreds of freehold pubs on the market.

“This massive increase in supply and complete lack of confidence in the market meant sale prices were very low.

“The first pubs sold were also of lower quality. As the recession went on, the market continued to see high supply and confidence remained weak.”

Strong demand

A rise in the quality of pubs resulted in an increase of prices, according to Hall and – at present – demand is still strong, meaning prices are continuing to rise.

Hall added: “The bottom of the market took place in about 2011 and, by this time, the poorest pubs had already been sold. What was coming to the market had generally increased in quality, meaning sale prices increased.

“This trend continued into 2015 and 2016 as confidence in the economy continued to return. Around this time, the supply of pubs to the market reduced as the pub companies reached the end of their disposal programmes.

“With demand still remaining strong, good trading performance of pubs in general, rising residential property prices and the quality of properties being sold still improving, average sale prices have continued to increase.”

To find out more about pubs for sale, lease and tenancy visit our property site​.

Related topics: Property law

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