The Agents

Barney Bettesworth

Director

Bettesworths

While the pub companies are actively looking to buy, there are still a number of private individuals - many searching for a new way of life, away from busy urban areas - in the market for both freehold and leasehold pubs. However, looking back at the second half of 2007, it is worth reflecting on the change of temperature in the market. On 5 July 2007 the bank rate was increased to 5.75%, the fifth successive increase and the fourth in the previous 12 months. The last time the rate was at 5.75% was way back in February 2001.

This factor, combined with the slowdown in the housing market, the introduction of HIPS, the wet summer, the Northern Rock fiasco and the volatility of the financial markets have combined to put a brake on sales. There are still buyers out there, and underlying demand is still strong, but the message is loud and clear - if a sale is to be effected, then a realistic view on price must be taken as buyers are looking carefully at returns before even making an offer.

There is no doubt that the licensed property market has slowed considerably and 2008 will not see anything like the volume of transactions of recent years. A further lowering of interest rates in the not too distant future will help, but there is a distinct air of caution among buyers.

While a number of applicants have had experience in the industry, several are looking for a change of lifestyle and the south and south-west remain popular destinations, partly due to the quality of life, but also increasing visitor numbers. This has come about partly due to world events and the concern over foreign travel, but also because of increased marketing by the South West Regional Development Agency. In addition, a recent poll indicates that more than a million people will move to the south-west over the next 25 years.

Recent research by the Halifax Bank has confirmed that the south-west region has recorded the largest net gain from internal migration of any of the UK's 12 regions in the past 10 years. Over 300,000 more people have moved to the region than have moved away, boosting the population by about 6%. With recent technological advances in IT, some buyers can retain their employment or contacts in other geographical areas, working remotely, while being based in the West Country. This can fit in with traditional trading patterns in tourism, where the winter months are quieter, giving time to concentrate on other areas.