Demand for better quality pubs boosts Walsall mortgage firm

A WALSALL mortgage firm specialising in the pub sector has doubled the number of properties for which it has provided lending.

Crystal Mortgages said the increase in activity owed much to a higher standard of public house now becoming available.

Many of the major pubcos have been forced to reduce the size of their property portfolios recently in an attempt to reduce costs.

This has seen a surplus of pubs come on to the market, many of them older properties in unattractive areas. As a result, many entrepreneurs are unwilling to take them on because they cannot make the business viable.

However, if better quality properties are becoming available then more would-be landlords might be prepared to take a gamble and invest in them.

This certainly seems to be the case for Crystal. It said that compared to the first quarter of 2010, the level of extra business represented an increase of more than £1m in lending.

Roger Dewsbery, senior underwriter at Crystal Mortgages, said: “There are approximately 25 pubs shutting per week, and while in the early days of the recession these were businesses that were already struggling, there are now attractive, proven sites available at very reasonable prices.

“Experienced pub operators are clearly identifying that much improved business opportunities are emerging, moving quickly to secure deals and looking for the best mortgages available. It is a part of a generally improved picture we have witnessed for business properties in 2011.”

The firm, which is lending to prime, near-prime and start-up businesses, said margins in the hospitality sector were generally low, so many landlords were searching for the best deal they could get in order to bolster their trade.