In its annual Survey of Pub Prices 2025, the specialist in the sale and valuations of properties in the on-trade cited the Budget in October as “introducing significant cost increases, threatening the stability of many pubs across the country”.
The report has stated “the cumulative impact of rising costs, inflation and the potential for reduced consumer spending, could result in widespread closures”.
Key findings in the report included the average freehouse sale price fell by 6% in the south of England despite a 14% increase in fair maintainable trade while sales in the north dropped by the same percentage, reflecting both declining profitability and market caution.
It also found the leasehold sector showed a 10% increase in sale prices, attributed to higher-quality units entering the market and a greater proportion of transactions occurring in the south.
Capacity of pub sector on rise
Meanwhile, 69% of pubs sold by Fleurets in 2024 remained in pub use, which was an increase from 66% in 2023. However, the south saw a rise in non-pub use with residential conversions being the most common alternative use, making up 62% of such sales.
And despite the total number of pubs declining – as the group stated has been happening for more than 40 years – the capacity of the pub sector is actually increasing, Fleurets added: “Once confidence returns to the market, we expect it will continue to do so”.
Fleurets director and head of agency north Simon Hall said: “The pub sector has always been remarkably resilient but the Budget’s impact on the profitability of pubs is a significant concern.
“It may not be possible to increase pricing to cover increased costs without risking a reduction in trade levels. History shows that rising costs without the ability to increase pricing, leads to business failures.”
Many still acquisitive
The report found the mid-market, which is driven largely by private buyers, has been most affected by the cost and availability of finance and lack of confidence.
Freehold pubs under £500,000 and those in prime locations have remained in demand. Despite the headwinds, there is still confidence in the sector with many corporate operators still acquisitive. Demand for sustainable pubs that fit into a clear operational model remains strong, especially among well-funded operators.
Hall added: “Opportunities still exist for those with the vision and resources to execute them.
“While well-funded and established companies may snap up the best units, marginal and underinvested pubs will be vulnerable. Some may survive by becoming part-time, lifestyle, or community-owned operations, while others may need to explore alternative uses if they are to avoid remaining closed.
“In the long term, the strongest will endure. With improved consumer confidence and better access to finance, the market can expect increased activity later in the year.”
