Business Outlook 2025 | Pubs

In 2024, we saw an increase in transactional activity across the pub sector, assisted by reasonable trading conditions, with cost pressures beginning to ease. With the expectation of interest rates falling back further, this all helped improve market sentiment following a turbulent few years.

However, there was little to cheer about from the Autumn Budget delivered by the newly elected Labour Government in October, which saw an increase in employers’ National Insurance contributions (NICs) alongside an increase in the National Living Wage (NLW) and National Minimum Wage (NMW), together with the reduction on business rate relief from 75% to 40%. The sector reacted with dismay, asserting that the significant increases in payroll and rates would jeopardise investment in the sector. 

Activity across the year remained polarised, with strong demand for assets under £600,000 and for prime properties, with the mid-market proving to be challenging. Corporate buyers were responsible for much of the activity, particularly the tenanted pub companies both as sellers and buyers. As an example of this activity, Christie & Co acted for Marston’s who sold packages to Admiral Taverns and Red Oak Taverns. It is encouraging that the number of pubs being sold across the market for continued use remains high.

As we move into 2025, it is expected that increased buyer and operator caution resulting from the Budget will be offset by an increase in the supply of pubs coming to the market with opportunistic and serial investors taking confidence in downward pressure on interest rates. The momentum we saw build in 2024 will continue, although the pricing of assets will need to reflect the operational challenges that exist.

Movement in the average price of assets sold, year-on-year

Whilst there were still operational and cost challenges as we entered 2024, the sentiment of operators and buyers was cautiously optimistic, with the expectation that cost pressures would ease and interest rates fall alongside improved consumer confidence. This led to increased levels of activity, with most of our key performance indicators being positive. However, these gains were reversed to a degree when it was announced in the Autumn Budget that employer’s National Insurance (NICs) would increase alongside National Living Wage (NLW) and Minimum Wage (NMW), and that business rates relief would be cut from 75% to 40%. Consequently, we have seen prices remain broadly flat with a very marginal increase on the previous year.

We anonymously surveyed pub stakeholders across the country to gather their views on the year ahead.

• We will continue to see an increase in transactional volumes
• The market will remain polarised, with strong demand for assets sub £600,000 and at the prime end of the market
• We will see a continued increase in M&A activity
• Operational challenges for pub owners and operators will continue
• Emerging signs of distress will encourage opportunistic buyers