What is the difference between freehold and leasehold pubs

However, unlike a tenancy, you do have the option to sell on the goodwill of the business — so if you build a very successful pub, you could potentially sell the business in the future and achieve a good return on your investment. Full details can be found here. If you wish to discuss these options in more detail, please do get in touch with our team, who will be more than happy to talk through your specific circumstances, plans and goals, as well as help you identify what type of pub agreement is best suited to you.

Our team can be contacted on or pubpartnersrecruitment greeneking. Covid has brought countless challenges for us as individuals and for many businesses and has been particularly tough on the hospitality sector.

Get in contact. Facebook icon Twitter icon Instagram icon. Find a pub. Pub tenancy vs lease: What is the difference? Pub tenancy agreement Pub tenancies are recognised as a cost-effective route into the pub sector, and one of the more convenient ways to own a pub business.

Tenancy overview You rent a pub from a brewery or pub company You will be self-employed and be responsible for all employees in the business You have shared responsibility for repairs to the property You cannot sell on the goodwill of the business Typically, a short-term agreement five years. I understand that that's "Freehold" but most Ads while stating it's Freehold they still say "Lease" and some of them ask for rent per annum.

Really confused. I'd appreciate it if someone could point me at the right direction here. Maybe I'm going at it the wrong way. Where do I start? In the strictest sense of the words, Freehold and leasehold mean what you think they do. Freehold is that you own it outright and leasehold is a rental situation. That being said, there are scenarios like what Peter K. You may also be seeing the business itself being offered as freehold or leasehold. In this case, you may be purchasing the business of the pub from a pub company, but the building the pub resides in is leased from a property owner.

The "pub" would be the business plan, decor, alcohol partnerships, etc. You should really look into hiring an Estate Agent to help you find what you're looking for. They will be able to assist in narrowing down your list, and may know of opportunities you're not seeing in ads. You should be aware that many pubs in the London indeed, the UK as a whole are sold as a leasehold with a beer tie.

This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some but not all Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London.

While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer. Freehold is simple - it's when you own the building and the land it's on. There's no rent to pay but you will still have to pay taxes! The cost of leasehold agreements is much lower than that of freehold opportunities and the initial capital investment is lower. There is also considerably more choice of available outlets.

However as leases hold little or no security for lending companies or banks, mortgages associated with leasehold agreements require significantly higher deposits and come with a number of associated conditions. Tenancy agreements are usually short term agreements where the tenant buys only the fixtures and fittings of the business and agrees to pay rent.

Tenancy agreements are not usually assignable so profits from the business can only be made on the actual trading figures of the venture not on any capital gains. On the termination of the tenancy the tenant returns the property to the landlord and usually sells the fixtures and fittings at valuation.

Whilst the decision often comes down to your finances and the availability of suitable properties, advice as to which form of agreement best suits your particular circumstances can be obtained by talking to one of the licence trade experts at Fleurets, the UK's largest firm to specialise in the sale and valuation of licensed premises.

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