Newcomers attracted to tenancies with accommodation

Rising numbers of people are applying to run pubs, spurred by the attraction of tenancies with on-site accommodation.Giles Thorley, chief executive...

Rising numbers of people are applying to run pubs, spurred by the attraction of tenancies with on-site accommodation.

Giles Thorley, chief executive at Punch Taverns, has cited rocketing house prices as the reason for the recent surge in interest.

"Applications are flooding in, roughly equally from those already in the trade - like assistant managers or chefs in managed houses who want to do their own thing - and from all kinds of people who have not been in the trade before," Mr Thorley (pictured) was reported as saying.

In London, the Flag in Crouch Hill, Stroud Green, is available for £23,000. That includes a two-bedroom flat on the first floor, a one-bedroom flat on the second and a well-equipped trade kitchen. "Obviously it will cost you more than that because you have to pay the first quarter's rent up front and pay for the current stock and any fixtures and fittings," explained Mr Thorley.

"But given that most pubs include accommodation, it can appear a very attractive deal when house prices are so expensive."

The lack of freeholds available on the market means that people are increasingly taking on leases with the major pubcos. This means that they pay a rental fee to the pubco and are tied in for products including beer and other alcoholic drinks.

Mr Thorley believes there are some good opportunities, with 20-year leases mostly costing between £20,000 and £30,000.

Andy Frisby, a negotiator at Fleurets, agrees that the pub market is buoyant. "At the moment the pub market is very strong," he said. "A lot of people still aspire to run a pub and some astute ones have recognised there are new opportunities with the change in licensing laws.

"There are also a lot of people coming from outside the industry looking to run a pub and for them it's purely a lifestyle-based decision."