The Report found that almost half (48 per cent) were sold for ‘alternative use’ – 54 per cent of which is residential. The growth in the average sale price of pubs for non-pub use was significantly higher than the growth in sale price for continued pub use.
“These results suggest the wider property market is seeing greater increases in value than the pub property market,” said Fleurets’ director and head of pubs Simon Hall. “Nationally there is a 16 per cent differential between the average sale price for non-pub use and continued pub use, whereas last year sale prices for pub use and non-pub use were much the same.
There is also a distinct difference between the north (+5 per cent) for non-pub use and the south (+28 per cent) for non-pub use.
Over the last three years residential conversion/development has been the most common use for pubs that are sold for alternative uses. Half of all pubs sold out of the trade have been converted to housing and the majority have been for single dwelling conversion.
Restaurant and retail uses have continued to be the second and third most popular end uses, consistently averaging between 10 – 15 per cent of all alternative use sales.
Despite common perception that convenience stores and care homes are taking over large numbers of public houses, the actual numbers are relatively low and consistently around 2 to 4 per cent of all sales for non-pub use. When they do happen, however, sale prices can be significant.
A third fewer bottom end freehold pubs were sold by Fleurets in the year to 30th September 2012 compared to the previous year. They still however, account for two-thirds of all our freehold pub transactions in the year.
Bottom end freehold sales are broadly defined as properties sold without accounts, sometimes closed or vandalised or if operational, under temporary tenancy/management arrangement. These are primarily pub company sales but also include administration sales and occasional private sales. Invariably they reflect some degree of forced sale situation.
Other findings of the Alternative Use Report:
- Sale prices ranged from £34,000 to £1.15m
- 35% of pubs sold for alternative use were at £150,000 or below
- The average sale price for non-pub use was 16% higher than for pub use (split +28% south and 5% north)
- The average sale price for non-pub use was 29% higher than last year
- The average sale price for pub use was 6% higher than last year
Pub is the Hub
Meanwhile, Pub is the Hub,which provides advice and support for licensees, rural pubs and community services, is set to expand its activities promoting community pubs with the help of a donation from CAMRA in December last year.
“The Campaign has made a donation of £18,000 to the organisation which helps licensees diversify into new business building activities.
John Longden, chief executive for Pub is The Hub said: “Like so many across the UK, we want to ensure that pubs and other rural services remain pillars of the community, so we have an advisor who can help specifically on community ownership projects.
“As an organisation we cannot advise groups on their legal or business decisions but we can help local communities to mobilise; giving them the tools they need to strengthen and support their local services by taking ownership of their local pub.”
The group will host its first meeting for community-owned pubs on 24 January in North Wales at The Raven Inn, Llanarmon-yn-Ial in Denbighshire. Four groups that are already running their own pubs will join representatives from two community groups looking at the possibility of taking on their local pubs.
Malcolm Harrison, a director for Pub is The Hub said that the idea was to share best practice. He added: “We were approached by a couple of groups who felt it would be beneficial to share ideas and in doing so discovered a number of community owned pubs in a relatively small area of the country.
"My colleague and specialist in this area, Mike Clayton, has worked with over 100 community groups in the last year alone to advise and steer them through the variety of ownership and operational models.”
Any other community group interested in joining the meeting can contact Pub is The Hub on 01423 546165 for more information.