Few pubs selling for alternative use

Very few pubs are actually selling for alternative use, according to Robin Mence, managing director of property agent Sidney Phillips.

Mence said that despite reports to the contrary, few pubs are being bought with the intention of converting them to houses or commercial uses because in the current climate

it makes little financial sense. He

estimates that just 10 per cent of the agent's sales are made up of those for alternative use.

"There is less activity in the residential market than there is in the pub market. If you can purchase a house cheaply, why would you purchase a pub and have to spend the extra capital converting it?" he asked.

The conversion of a pub to residential use requires planning permission, which Mence said was unattractive to both buyer and seller at the moment because of the risk of not attaining it and the time it takes to acquire.

However due to their A4-use class, pubs do not need permission to be converted into retail premises, offices or restaurants.

"There is currently very little activity in the commercial market either," said Mence. "If you're looking for something such as a nursery or a shop, for example, there will already be several of the same businesses on the market for sale, so why would you go to the trouble of converting a different building?"

Richard Payne, sales director of Caldicott Payne Commercial, agreed.

"Mortgage companies just will not lend against new developments at the moment," he said.

"Everyone is running scared simply because it is so hard to get the money to convert them."

However Fleurets, which recently announced that a third of all freehold sites it sold were for alternative use, said that demand for pubs which have a higher alternative use value (HAUV) was increasing.

Simon Hall, director at Fleurets, said: "I'd suggest that we are perhaps handling more of these conversions than any other agent right now, but there is good reason for this. Much of the HAUV market is driven regionally and it's a case of having the right contacts in the right regions, so you are 'plugged-in' to potential purchasers."

• Sidney Phillips has recently expanded with the opening of a new office in Hexham, Northumberland. It is the company's seventh branch and gives it complete coverage of England and Wales.

Robin Mence was also recently appointed as managing director. Former managing director John Williams has become chairman.