Scottish property focus

Scotland's 'lifetstyle' rural pubs market is booming on the back of red hot interest from England - even if a sizeable number of investors ultimately...

Scotland's 'lifetstyle' rural pubs market is booming on the back of red hot interest from England - even if a sizeable number of investors ultimately sell up and go home.

Scottish-based estate agents agree the trend which has been developing for several years shows no sign of let-up. 'New' areas, like Sutherland and rural Fife, are now acquiring the same sort of popularity as more established desirable regions, such as the scenic West Highlands and the Scottish Borders.

Some experienced operators warn it can be too easy to buy quickly in Scotland - then repent at leisure. But none of the individual setbacks are having a significant effect on sales.

English dominance

In the last few years investors from England have dominated the scene, taking advantage of high property values at home to sell in order to snap up Scottish inns that are still relatively cheap. Agents say a price range of £240,000 to £400,000 will buy almost any rural trade business, short of a full-on hotel.

Many pubs changing hands also have accommodation - classic country inns typically offering four to eight letting rooms.

Christie + Co director Denis Hillier says: "Many buyers are clearly looking for a quality of life they might find elusive at home - preferably in a place which can also turn a good profit for a reasonable investment of time and effort.

"Not all of the visitors to this area arrive by road. The whole area is massively popular with yachstmen, and is part of a well-established west coast circuit - there are superb local marina facilities, and it's almost inevitable a well placed pub can expect to do well."

Gordon Mair, a partner in Edinburgh-based agent Bruce and Co, is equally upbeat. "Buyers are often aware that buying a village pub is not going to make them a millionaire, but will give them a different type of life from the Monday to Friday, nine to five treadmill, while allowing them to work as a couple together," he says.

Another advantage, he suggests, is that most of the value is derived from 'bricks and mortar', rather than less certain factors like goodwill or potential.

Lifestyle pubs and the locals

Keith McBain at agents Creevy LLH says investors tapping into the lucrative north-east oil, contract work and IT markets are also taking a deep interest in lifestyle pubs - as are the pubcos.

But ordinary first-time investors appear to be taking a more cautious approach. Michelle Kelsall, who with husband Chris crossed the border to buy the Failford Inn in rural Ayrshire, sounds a word of warning.

"Things have come together for us very well - our beer is highly rated, and our food is attracting people from Glasgow and beyond, but it wasn't like that when we moved in," she says. "We thought the pub had been doing well, but in fact it was past its heyday and it took a major effort to turn into what it is today. We've learned from our mistakes.

"I'd strongly advise people to really get to know the area they intend to do business in, and not be impressed only by the view."

Staffing can be another problem, Michelle says, particularly in a pub where the existing employees have set ways of doing things - in an area where alternatives may not be easy to find. Some agents also privately concede the typically long, dark, wet Scottish winters can be a major test of an investor's determination.

And Alan Gordon, a partner at property and surveying firm DM Hall says that even if you have excellent business development plans the local market is crucial.

"It is very risky for new owners to actively discourage an establishment's existing customer base," he explains.

"As a general rule, it is safer to accept a business for what it is, rather than change it and risk alienating existing customers."

And, he adds, even underperforming local competition should be sized up as potential rivals - after all, even a down-at-heel rural pub could be taken over by someone with a plan just as good as yours.