Fleurets’ Survey of Pub Prices 2025 says that the cumulative impact of rising costs, inflation, and the potential for reduced consumer spending, could result in widespread closures.
Photograph: Hulki Okan Tabac/Pixabay
The key features of the report are as follows.
- Freehouse sale prices
In 2024, average sale prices in the South fell by 6%, despite a 14% increase in fair maintainable trade (FMT). In the North, sale prices dropped by the same percentage, reflecting both declining profitability and market caution. - Leasehold sector resilience
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. - Alternative use trends
In 2024, 69% of pubs sold by Fleurets remained in pub use, an increase from 66% in 2023. However, the South saw a rise in non-pub use. Residential conversions were the most common alternative use, making up 62% of such sales. - Pub numbers
While the total number of pubs is, and has been in decline for more than 40 years, the capacity of the pub sector is actually increasing, and once confidence returns to the market, Fleurets expects it will continue to do so.
Looking ahead into 2025, it appears that both the economic and trading outlook will continue to be challenging. The autumn Budget is set to pile significant additional costs onto pub operators, at a time when many are already barely breaking even.
“The pub sector has always been remarkably resilient, but the Budget’s impact on the profitability of pubs is a significant concern,” said Simon Hall, Director and Head of Agency North at Fleurets.
“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.”
‘Opportunities still exist’
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.
Simon 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 under-invested 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.”
