Property: Saloon Selectives

Special Agents 2: The Pub Converter; It's closing time for more and more pubs, and many are changing from public to private houses. Oliver Bennett meets the second of our specialist estate agents, and a satisfied punter

IT'S ONE OF life's little ironies: on high streets and precincts across the land, bars are opening in old banks, warehouses, even former cinemas and supermarkets, selling ciabatta sandwiches and Czech beers to hordes of boutique boozers. Meanwhile, in side-streets, lesser suburbs and low-rent turnings, traditional pubs - real pubs, with keg beer, polyester- clad punters and sausage sarnies - are in crisis. For them, last orders are being called, and with an air of some finality.

Pub numbers have long been in decline, but over the last decade many more have fallen out of circulation. There are various social reasons for this, but the key impetus for the latest wave of closures was the move by the Monopolies and Mergers Commission in 1989 to restrict the number of "tied" pubs - that is, those establishments under the control of a handful of large brewing consortiums. Of a total of some 70,000 pubs in the country, about 11,000 came up for sale then. Faced with this glut of pubs, developers and individuals began to see the housing potential in these brewery "disposals", and many became private dwellings.

"There are still pubs on the market from the 1989 disposals, although there are now fewer than before," says Yaser Martini of Fleurets chartered surveyors (and yes, he has heard plenty of jokes about his name). "It's now a trickle as opposed to a flood. But the odd one still crops up occasionally."

Fleurets was set up in 1820 and now has seven offices across the UK; as the biggest pub and hotel agent in the country, it handled many of the brewery disposals. "Excuse the pun, but they did tend to be the bottom of the barrel," says Martini. For obvious reasons, the breweries unloaded the less profitable pubs, often in desiccated districts.

But as the housing recession of the late Eighties and early Nineties forced the kind of opportunism that has led to the rise of change-of-use developments - loft and church conversions, for example - developers jumped on old boozers, particularly in gentrifying districts such as Islington. Martini estimates that of Fleuret's pub stock, some five to 10 per cent is currently sold as homes, with most of it going to property developers and a smaller proportion sold to private buyers. Martini describes the latter as "people with a bit of flair, and primarily based in London".

He lists the benefits of purchasing your own pub. "They are often of good size, and will usually allow for more than one bathroom. There might be a function room which makes a big living- room, and there is usually accommodation above the bar area. They often have a car-park and a garden, and they offer a great opportunity for a live/work conversion." And, square foot for square foot, they are often a bargain, as they are valued by business criteria rather than the usual factors of location and size that influence the prices of orthodox housing stock. "Normally, the bigger the place, the more it's worth," says Martini. "Instead, pubs are judged primarily on their turnover."

Yet most interested people settle for reading a copy of Fleurets' fascinating newsletter rather than committing themselves to buying a pub; there are several factors which often put priv- ate residential buyers off. One is the challenge of getting change-of-use planning permission from the local authority - easier in some areas than others. "You've got to argue for your planning, and your bid is conditional on gaining the permission," says Martini. "This has to allow for change of use, and could take three months, but if there are local objections it could take seven to eight months, maybe even more."

Martini adds that planners are more likely to allow change of use if the pub is run-down and underused. "Your planning application is less likely to be successful if the pub is considered to be a local amenity of the sort that you might find in a village," he says. Just because you never see more than three men and a dog in the Old Bull and Bush does not mean it is ready to lie down and die - many pubs, while unprofitable, are considered important to the community, particularly in rural areas.

Mortgages, he says, are "not necessarily as hard to get as one might think, though much depends on whether one is buying a property as a going concern or an asset." The mortgage is obviously conditional on planning and, again, one might have to convince recalcitrant lenders. Martini adds: "Buyers should take into account the bridging time it takes to get planning permission, and build in the cost and time of converting - some pubs are quite difficult to convert."

Developers are more likely than individuals to take pubs on, but they tend to refurbish pubs blandly into one- or two-bedroom conversions that do not differ much from orthodox housing stock. This usually has the effect of destroying the pub's flavour; which can be rather poignant, particularly if it has been trading for centuries. There is often a local sense of loss - never mind that the pub is a dead ringer for the Slaughtered Lamb in the film An American Werewolf in London.

Individual buyers are more likely to retain a pub's atmosphere and interior. Film-maker Julian Cole bought a pub called the Britannia in London's East End. It lies in the shadow of one of Hawksmoor's finest churches, St George- in-the-East, and has been serving stouts, milds and porters to local stevedores for at least two centuries.

Cole bought through Fleurets; he paid pounds 60,000 for the pub in the mid- Nineties. Everything went reasonably smoothly: planning permission from the local authority, Tower Hamlets, was "not too difficult" to obtain, and getting a mortage was again quite easy (although it helped that he had half the money up front). And the surveyor gave it a good report, which Cole was not expecting, as the building had not been renovated for decades.

Indeed, the only real blip for Cole was the process of gaining exemption from VAT. "If you buy a working pub, they charge VAT, just as though you're buying a business, but people buying pubs for residential purposes are exempt from this," he explains. So he was dismayed to find that the brewery wanted to charge him VAT on the price of his new home. But after a flurry of solicitors' letters the matter was dropped.

The technical details over, Cole found that there were other, more emotional factors to contend with. "When I bought this place, it was still a working pub," says Cole, who closed the deal over a pint in the bar. "The publican said, 'I'm going to pull the last pint of Guinness,' and I felt very sad then, thinking that this pub had been open for 200 years." Although it wasn't profitable, the Britannia still had a loyal group of customers, a lot of whom were "a bit disgruntled" at the loss of their local. But, as Cole says, "the brewery was pleased to get rid of it. If it had been refurbished as a pub, it would have cost an incredible amount of money." As its surroundings are now predominantly Muslim, the stock of local drinkers has dwindled even further.

But Cole, who has maintained the Britannia's internal format, likes to think that one day it might revert to its previous use. "I've tried to convert it in a sympathetic way," he says, and all the elements of its interior order have been maintained, from the huge front bar to the grand upstairs function room, its two fireplaces facing each other across the kind of space that would not disgrace the lofts now being carved from industrial buildings nearby.

At pounds 60,000, the Britannia was a bargain, even for the time that Cole bought it: during a recession. But he's had a lot of work to do, and still has. "It's been masses of work and two years out of my life," he says. He has tried to recycle materials as much as possible to save resources. But the lack of refurbishment also meant that the pub's past remains close to the surface, so the Britannia still carries pungent traces of its history. In the yard Cole found a well filled with masses of clay pipes and beer bottles dating back to the mid-19th century. And thrown into the deal was an enormous garden behind the pub, where a music hall stood until the Second World War, and which Cole now intends to cultivate.

He has become interested in the history of the pub and its area, close to where the Battle of Cable Street was fought in the Thirties and to Bluegate Fields, mentioned in Oscar Wilde's The Picture of Dorian Gray as a place of iniquity. "I've spent hours with the local history society, looking at old records," he says. "I can trace the name of the Britannia back to 1840 but not before that." The pub's working days may be gone, but in this case, they have not been forgotten.

Anyone interested in owning a pub should steel themselves for a bumpier ride than normal. But some buyers think it worthwhile: not just to get a lot of space for their money or to release the inner guv'nor, but to caretake an otherwise redundant slice of Britain's hospitality heritage.

! Fleurets' London head office is on 0171 636 8992