Pub market recovery still years away

Agents predict it could take between two and five years for the pub property market to return to 2007 levels, when prices were at their peak.

In a straw poll of six agents, five said recovery was closely tied to banks' willingness to lend to the sector.

Fleurets' Graeme Bunn predicted recovery would take three to four years. "The tied leasehold market will take years to recover. The prime freehold market has not suffered at all," he said. He added that uncertainty over the tie, following the Business & Enterprise Committee report, could also hamper recovery.

According to Bunn, optimism is returning, "though this isn't being borne out in increased activity", due to banks' reluctance to lend.

Christie+Co's Simon Chaplin said there would be an "eventual return" to levels of two years ago. But, he added: "It will depend on availability of debt from banks."

At London-based AG&G, James Grimes said: "It all depends on the banks. People are willing to have a gamble and those with cash are getting on and doing it."

Stephen Taylor, at Guy Simmonds, agrees that a lack of funding is responsible for "holding the market back". He said it helped that pubs, "are now valued on a multiple of proven net profits rather than potential profits". Taylor admitted the next five years would be difficult, but he remained positive.

At GA-Select, Graham Allman said recovery would take a "couple of years". He added, "once domestic properties start selling, the worst is over." Davis Coffer Lyons' Paul Tallentyre predicted London's recovery by September 2011, while the rest of the country could take three to four years.