Demand for pubs still strong with freehold prices up 41% in 2022
The average price of a trading freehold pub rose by 41% in 2022, according to new information from leisure property specialists Fleurets.
This was primarily driven by sales in the South, which saw a dramatic increase in price of 54% to £1,148,750, while the average sale price in the North was £530,688.
Although the prices of pubs have gone up, Fleurets said there was a reduction in transaction volumes, especially in the South with a fall of 35%.
The price of bottom end freeholds, that is, pubs sold without accounts and often closed, also rose. Bottom end freeholds saw an increase to 15% to £373,712 in 2022. The amount of transactions did decrease, however, as more operators looked to balance the books and continue operating, through increased staycation trade, government support, and savings.
Fleurets’ data also revealed that 37% of 2022 freehold pub sales were for alternative uses, which was in fact lower than in 2020 and 2021. The most common alternative use was for residential, at over 60%. While 52% of bottom end pub sales were for alternative uses, a substantial 83% of trading freeholds were sold for continued pub use.
The number of pubs in England and Wales has continued to decline, a trend seen since 2001, with Fleurets estimating that there would be 45,850 operating pubs as 2022 ended. However, the number of bars, venues and large high street units increased by 0.5%.
Simon Hall, director at Fleurets, cited the increase in leisure operators taking high street units, the introduction of Use Class E, and younger crowds wanting exciting new concepts such as craft beer or cocktail bars, as reasons for some of the changes seen. An increase in footfall can bring numbers in to big city pubs, however local alehouses may continue to struggle to keep up.