Cost of a freehold pub £150k down in 2023 vs 2022

By Rebecca Weller

- Last updated on GMT

Fleurets pub prices survey: average cost of a pub stood at £550k in 2023  (Credit: Getty/TonyBaggett)
Fleurets pub prices survey: average cost of a pub stood at £550k in 2023 (Credit: Getty/TonyBaggett)

Related tags Property Fleurets Freehouse

The average sale price for a freehold pub was almost £150,00 lower in 2023 than the previous year, the Fleurets Survey of Pub Prices January 2024 has revealed.

According to the report, an average sale price for a freehold pub stood at £550,000 last year, compared with almost £700,000 in 2022. The figure was also just below pre-pandemic levels.

The report detailed “developers and investors” were “active buyers” of freehold over the 12-month period, particularly in the first half of the year, with the effects of higher base rates and bond yields filtering through in H2.

“This had a knock-on effect with pre-let developments because higher yields and the significant increase in build costs made previously agreed deals unviable without an adjustment to land value”, the leisure property specialists said.

Market transactions 

Looking to the leasehold market, there were increase levels of nil or low premium lease assignments, according to Fleurets, with new lettings of recently vacated fitted units.

The report added the leasehold market was “dominated by individual and small multiple independent operators with the local knowledge, operational flexibility and confidence”.

In addition, the private buyer freehold market was the “most affected area” due to “funding and confidence issues”, resulting in “greatly reduced levels of activity” in 2023.

The report stated: “Vendors, many of whom have continued to trade well, decided to defer formal disposal plans due to the lower likely sale price, thereby reducing supply further.
“Instead, we have seen more opportunities being available, and more deals being done, by both corporate and private buyers, in off market transactions.”

Strong demand 

By region, the average sale price of a freehold freehouse in the North of England was £466,000 last year, down 12%, while in the South, the average price was down 9% to £1.5m.

Almost half (45%) of freehouse sales during 2023 were to individual or small independent buyers with 55% going to corporate operators and developers.

The report said: “The freehouse market in 2023 can be summarised as having a lack of private buyers.

“Transactional activity was actually slightly higher than last year, but looking in detail this can be seen to be a result of certain types of assets being sold, mainly to corporate operators or developers.

“Wet led freehold pubs have been in strong demand with the most active buyers being Valiant, Trust Inns and Red Oak mainly in the north of England.”

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