The Agents

John William

Managing director

Sidney Phillips

Despite the well-documented losses by US banks and other lending institutions in the sub-prime mortgage sector and the knock-on effect on the housing market in England, there has been no evidence so far of this affecting the sale of freehold licensed property.

The pub and hotel market generally lags behind the residential sector and, while there may be a slowdown in the months to come, this has not yet been evidenced by the current level of enquiries and sales.

During October, Sidney Phillips reported completion of more than 30 freehold and leasehold sales, and this level of transactions is continuing throughout November.

With the forthcoming increase in capital gains tax (CGT) from an effective rate of 10% up to 18% from next April, coupled with the withdrawal of the taper relief for those who have operated their business for over two years, some freeholders are contemplating bringing forward their retirement to take advantage of the current, relatively favourable, tax rate with a view to minimising their capital gains liability.

Such sales must be contracted before 5 April 2008, otherwise the opportunity for taper relief will be lost.

Anyone contemplating a disposal would be well advised to seek early advice if a sale is to be concluded before the end of the current fiscal year.

Forecasting what will happen to the market over the next year is quite difficult. However, it would appear that there will be a continuing number of freehold properties coming on to the market over the next few months, especially in the early part of the new year.

It seems there will be enough demand for freeholds from purchasers so we expect continued buoyancy and activity in this market sector. As evidence of continued strength of the market, Sidney Phillips is selling a closed freehouse, the Bulls Head, in Craswall, Herefordshire, on behalf of the mortgagees. Over the last two weeks this has attracted 30 viewers, with five parties wishing to purchase.

The sale is going to "best and final offers" next Friday at 12 noon, when the guide price of £340,000 is expected to be exceeded. Interest continues to be expressed in other smaller freehouses, which are perceived to be good value in relation to the present cost of acquiring residential property.