Pub sale slowdown predicted

A slow period for the market has been predicted after a rush of sales to beat the changes in Capital Gains Tax (CGT) and the effects of the downturn in the economy as a whole.

The growth in residential property prices has dropped to a 12-year low and the Bank of England has cut interest rates by 0.25% to 5% in a bid to make borrowing cheaper and kick start the economy.

Equity from people selling homes to enter the trade for the first time is being greatly restricted as prices drop and both buyers and sellers adopt a wait-and-see attitude.

Simon Hall, divisional director at the Leeds office of Fleurets, said: "We're seeing a general slowdown in the market. ​

"There are a lot of freehold owners who have not come to terms with the levelling of the market and are sitting on their assets.

"There are lots of leaseholders wanting to sell and a dearth of purchases.

"Good deals on good properties sensibly priced are still happening, but if it's a pub that has issues it's going to be tough — but I see it as a levelling of prices — it's not a crash."

I see it as a levelling of prices — it's not a crash​Simon HallFleurets

Funding, especially for leaseholds, is hard to obtain because of the business risk.

Hall said: "Funding is still available, but deals at the fringe, possible 12 months ago, will not be possible now."​

Stephen Taylor, of Guy Simmonds, said: "Residential firms are now admitting that the market is suffering and properties are staying on the books for longer and going for lower and lower prices. ​

"While I don't see this being replicated any time soon in the pub market, I do think that businesses now must be sensibly valued and priced accordingly."

Graham Allman, of GA-Select, said: "Undoubtedly this will be a quiet time for the market after a flurry of sales to beat CGT reforms."​

Neil Morgan, of Christie + Co, said: "The downturn in the economy has brought a sense of realism to the market, and it is down to us agents to sensibly advise prospective sellers. ​

"Whatever happens with the economy the pub market, as it has proved before, will remain resilient.

"Quality sites and those priced realistically will always sell."

Silver lining​

But Hall added: "Every cloud has a silver lining and in this case buyers are enjoying a unprecedented level of availability.​

"Private operators looking to acquire new sites in both the freehold and leasehold market have a massive choice of quality pubs that have not been available for a decade.

"Recent disposals from many of the major pubcos have seen a great selection of sites hit the market."