Commercial Property Profiles Public Houses

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Commercial Property Profiles Public Houses

Up to 100 per cent loan to value for experienced publicans from some lenders!

Many people believe that the pub is a part of what makes England great, whether it is the ‘centre of the village’ that many local pubs become, or a ‘mega-pub’ and part of a commercial chain. The liquor licensing laws have given publicans considerably more control over when they close their doors, and combined with attractive commercial mortgage deals this has made the pub trade more interesting to entrepreneurs.

Whether you are considering your first pub venture, or are an experienced professional landlord, knowing the ins and outs of commercial mortgages for pubs can save you time and money.

Generally, commercial mortgages for pubs can provide up to 85 per cent of the purchase price. This varies on the loan-to-value ratio of each individual lender, as well as according to the value of the property. Usually, the lender will look for a deposit of 20 or 30 per cent, and will also require proof that repayments will be met.

If you are an existing business looking for a mortgage to make improvements, the lender will need a full set of trading accounts covering the last two years. Start up businesses will need to provide a full business plan displaying projected incomes.

Many lenders place pubs into a high-risk category of commercial mortgages, and this can have a considerable impact on mortgage availability and rates. Some mainstream banks and mortgage providers are not willing to provide commercial mortgages to pub proprietors. Other independent commercial lenders may be more willing to provide finance for this type of venture.

Before seeking a mortgage quote, you will need to make sure that you conform to the following guidelines:

Trading history of pub or relevant income projections for a startup

• Details of pub permits and licenses
• Experience of the landlord (this can greatly affect mortgage availability)
• Location of the pub
• Amount of deposit
• Credit history
• Pub type (Independent or tied to brewery: freeholds are unrestricted in what they sell, and this can make a difference to start up costs.)

Would-be publicans should also be aware that if 40 per cent of the property is residential space that you intend to occupy then the mortgage would have to adhere to regulations regarding residential mortgages.

If you are looking to borrow money for any type of property for any purpose, or for business or mortgage advice, please complete a Mortgage Enquiry Form below and we will arrange for one of our specialist mortgage advisers to contact you. Alternatively, you can call us on 0845 108 0505.