4

I'm a foreigner and I want to open a Pub in London. I'm searching for Pubs to buy but everywhere I look it says "Leasehold" or "Freehold" and I'm really confused. I googled it but I still don't get what they mean.

I'm looking for something to buy without paying rent, in a good location. 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?

  • 2
    Many portions of land in the UK are owned by wealthy individuals. For those areas, you almost never get freehold, only a 99 year (or other duration) lease for which you need to pay ground rent. – Peter K. Dec 17 '16 at 16:35
5

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. mentioned in his comment, where you're purchasing the building and business outright, but the land it sits on is actually being leased from a separate land-owner.

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. but not the physical structure in which it resides.

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.

3

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.

2

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!).

Leasehold is when the property is leased - rented out for a fixed period that could be anything from 6 months to 199 years. There will be a rent to pay. The person who owns the property is still the freeholder.

There may be some confusion caused by what is being sold. You can buy out a lease from the current leaseholder. It's also possible to buy the freehold of a property that is currently leased to someone else.

It is also possible to have a freehold building on leasehold land.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.