The Simon the Tanner pub in Long Lane, Bermondsey, looks in a sorry state. Last orders were called months ago, then the windows were boarded up and the doors locked, and it became another sorry statistic in the state of the UK pub trade.
A report just out from the British Pub and Beer Association tells us that 52 pubs a week are closing thanks to taxes, the smoking ban, the recession and cheap supermarket alcohol.
But this sad story has a silver lining, as anyone hungry for a home and a good investment opportunity will tell you. At the end of the day, a pub means land - and opportunity.
The Simon the Tanner is for sale with more than 3,000sq ft of space - the £690,000 price tag equals the cost of a two-bedroom central London flat, and twice as big. This is a property that will soon attract a buyer to this fast-gentrifying pocket of London.
Eighty per cent of pub closures are in urban areas. And pubs are good value. Maybe it’s the hassle of navigating the planning and heritage obstacles, as the sale price for pubs has plummeted by 23 per cent in the past year.
'Clever buyers and developers look for locations where there are several pubs, which often means that at least one is doing badly and the owner may be willing to sell'
The cheapest freehold pubs in London cost from about £200,000 and, according to size and position, prices rise to well over £1 million, says Gavin Sherman of specialist broker Paramount Investments, which has hundreds for sale at any one time.
As a rule of thumb, pubs are worth about 10 to 12 times their annual earnings, so a premises with profits of £100,000 would be worth a shade over £1 million.
But neighbouring houses in areas such as Kensington or Notting Hill may be worth £3 million, offering a quick fortune to anyone who is able to convert the pub to residential use.
When the 4,600sq ft Archery Tavern in Bathurst Street, near Hyde Park, went on the market for £1.5 million, it attracted more than 200 viewings and 23 rival bids, eventually selling for over £2 million.
Several deep-pocketed but disappointed homebuyers were outbid by the operator of an upmarket French brasserie called Angelus, who did not want a home but a business.
Estates such as Grosvenor and Cadogan encourage the continuation of well-run, unrowdy local pubs because they provide village-like charm. The Grenadier in residential Wilton Row, tucked away behind Belgrave Square, is one such classic.
But estates have been unable to save a string of historic pubs on their patch. A survey by the Chelsea Society, a local amenity group, reveals that in the Fifties there were 54 pubs in the old borough of Chelsea, yet only 22 exist today. One casualty was The Australian in Milner Street, now an interior design showroom and apartments.
In Pollen Street, Mayfair, The Black Lion and French Horn is being split into four apartments, including a three-bedroom duplex penthouse with two roof terraces, priced at £1.29 million (right).
“It’s not the sort of home you would expect to find above a pub in this location,” says Guy Passey of estate agent EA Shaw, which recently sold swish, freshly converted Soho flats above The Intrepid Fox in Wardour Street and B@1 in Great Windmill Street.
Many pubs are sold with vacant possession, while others have short “fag-end” leases, where the freehold can eventually be acquired. Auctions are a good place to start your search. Canny buyers and developers look for locations where there are several pubs, which often means that at least one is doing badly and the owner may be willing to sell.
A former pub in Narrow Street, Limehouse, close to a Gordon Ramsay-owned gastropub and the historic Grapes tavern, has been on and off the market for five years. It is now for sale again and comes with planning consent for conversion into a four-bedroom, 3,358sq ft dwelling with garden and roof terrace. Offers in the region of £800,000. Call 020 7644 2333.
In Gloucester Road, South Kensington, a substantial 10-bedroom property above a working pub - The Gloucester Arms - is for sale. The price is £2.95 million for the freehold. Call Foxtons New Homes on 020 7973 2020.
Pubs also have distinctive architectural qualities that make them stand out as highly individual homes. They often occupy corner plots and have double-aspect views. Victorian pubs tend to have the best layouts for conversion. Typically, there are high ceilings, big windows, large cellars and function rooms.
Conservation groups such as English Heritage are fighting hard to stop demolition or unsympathetic changes. Grade II listing, which many pubs have, only really protects the exterior of the building rather than the interior.
Live/workers who want to transform the bar area into a studio or workshop, while keeping the accommodation above intact, are often looked on favourably by planners. Unless it is a village pub, where local protests are likely, planners are sympathetic to alternative uses because re-use helps regenerate the area.
Pubs have a flexible A4 planning “use class” that can be changed to another commercial or residential use. Often, pubs come with land, a beer garden or a car park that can be developed. Before you buy, especially if the pub is in a conservation area, ask local planners about their attitude to the property. Also liaise with local residents and try to get them on your side before making a planning application.
Clerkenwell became a centre for the brewery trade during the Industrial Revolution and the legacy can be seen today. One of the area’s most fashionable developments is Brewery Square, formerly an Allied Domecq factory plant.
More than 200 homes - boldly modern in design (copper, zinc, glass finishes with projecting bay windows) - have been built alongside offices, a supermarket and retail plaza, grouped around a semi-enclosed square reached through a listed arch in St John Street. Flats start at £350,000. For information, call estate agent Currell on 020 7253 2533.
A three-bedroom penthouse with a huge 1,200sq ft terrace is on sale for £1.19 million. Call Hurford Salvi Carr on 020 7250 1012. Six one-bedroom flats are for sale in Cannon Brewery, the historic retained section of the development. These will be ready in mid-August. Prices start at £275,000. Call 020 7250 1012.
The historic Ram Brewery, a part-Georgian complex in Wandsworth town centre, is to be transformed into a six-acre urban quarter, with up to 1,000 homes, waterside bars, cafés and shops.
For generations the site has been inaccessible to the public. Two skyscrapers will loom over listed heritage buildings, while a new pedestrian route will cut through the site along the Wandle River to the Thames path. Visit www.paramountinvestments.co.uk.