The average value of freehold pubs rose by 5.5% last year, as the economic recovery finally reached the pub market.
That's according to figures in property agency Fleurets' survey of pub prices for the year to September 2015.
There was a 22% drop in freehold sales, thanks in large part to the fact that there was a continued reduction in the supply of bottom-end freehold pubs.
Meanwhile, there was a 46% increase in the number of leasehold deals.
There was also increased merger and acquisition activity, with several tenanted and managed package deals completing in the last 12 months, including Stonegate acquiring 53 pubs from Tattershall Castle Group in September 2015, and Punch Taverns selling 158 wet-led tenanted freehold pubs to New River Retail for £53.5m.
Fleurets said that the underlying economic recovery had led to a change in market dynamics, moving from being dominated by discount deals and bargain hunters, to the owners holding more of the cards.
Big tenanted pub company operators have all but stopped selling individual community pubs and instead have started to see the benefits of selling them in groups.
There were twice as many leasehold pub deals in the South as there were in the North.
Fleurets also analysed all of its freehold pub transactions during the year to see what they were used for after they were sold. During the year to September 2015, 50% of pubs sold by Fleurets remained as pubs, down from 56% the year before.
The average sale price nationally for pub use was virtually identical to the average sale price for alternative use, being just -1.1% lower for pub use. There was, however, a significant regional variation with sale prices for continued pub use being 6.7% higher than alternative use in the south, whereas in the north pub sale prices were -12.4% lower than alternative use sale prices.
For a full copy of the report, click here.
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