Pub mortgage: finance to buy a freehold pub

In England and Wales you apply to the council's licensing team to transfer the existing premises licence into your name, with the seller's signed consent, and you can ask for the transfer to take effect as soon as the council receives the application. The police, and the Home Office on immigration grounds, then have 14 days to object, and an objection normally goes to a hearing. The statutory fee is £23. The licence moves with its existing plan, hours and conditions, so anything you want to change, such as later opening or a new outside area, needs a separate variation. Your solicitor and the lender's solicitor check those terms against your business plan, and completion of the pub mortgage is normally timed so the transfer application goes in on the day you take over.

Do I need a personal licence to buy a pub?

Not to own the pub or hold its premises licence, which can sit with you or your company. Selling alcohol is different. Every sale must be authorised by someone holding a personal licence, and a licence that permits alcohol sales must name a designated premises supervisor who holds one. If the outgoing supervisor is leaving with the seller, a separate application names the new one. A personal licence comes from your local council and requires you to be 18 or over and hold an accredited licensing qualification. Lenders like to see the buyer or the named manager holding one, because it shows the licensed trade experience they are lending against.

• Premises licence. The licence, its plan and every condition attached to it.
• Trading hours. Permitted hours for alcohol, music and late night food.
• Supervisor. Who will be the designated premises supervisor from completion.
• Licence history. Any reviews, warnings or police concerns in recent years.

GOV.UK explains the personal licence to sell alcohol in England and Wales. Our pub and bar finance hub covers fit out and stock, and the guide to buying, funding and opening a pub walks through the steps before an offer. Instant Quotes shows which panel lenders could look at your pub purchase.

Yes. Listing does not stop a pub being sold or borrowed against, but it changes the timetable, and lenders ask about it because it could also slow a future resale. In England an owner who wants to sell the freehold of a listed pub with vacant possession, or grant or assign a lease of 25 years or more, must tell the council first. That starts a six week interim moratorium. If a community group asks to bid in that window, the moratorium runs for six months from the notice. Once it ends the owner can sell to anyone at any price, within a protected period of 18 months from the notice. A sale made in breach of the rules can be ineffective, so the lender's solicitor will want to see the seller's notice and the dates before you exchange. Taking out the mortgage is not a sale under the scheme, so borrowing against a listed pub you own does not trigger a moratorium.

Will the new community right to buy change pub sales in England?

It will once the reforms start. The English Devolution and Community Empowerment Act 2026 extends the moratorium on listed assets to 12 months and gives community groups a right of first refusal at market value, with an independent valuation where the price is disputed. These provisions take effect only when the government brings them into force, so check the position when you make an offer. For a buyer the practical effect is a longer wait before a listed pub can change hands, which matters if your finance offer or a bridging loan has a fixed expiry date.

• Listing status. Whether the pub is on the council's list and when it was listed.
• Seller's notice. The date the council received it and whether a group asked to bid.
• Timetable. When the moratorium ends and how long your offer of finance lasts.
• Planning. Any extra protection the council gives pubs in its local plan.

The rules sit in the Localism Act 2011. A closed listed pub bought to reopen may suit a bridging loan first and a commercial mortgage once it trades. Instant Quotes lets a buyer test short term finance for a pub that needs time before it can be sold or reopened.

A pub mortgage is a commercial mortgage secured on a freehold pub and repaid over a term of years, where the lender looks at both the property and the business trading from it. Unlike a standard commercial mortgage on an office or warehouse, a pub is valued as a trading business. Its worth depends heavily on what it takes over the bar and in the kitchen, so the trade and the operator matter as much as the bricks.

How it works

• Purpose. Buying a freehold pub, buying the freehold of a pub you lease, or refinancing an existing pub loan.
• Valuation. Usually carried out by a valuer with licensed trade experience, who values the pub as a fully equipped trading entity, taking account of turnover, profit and the condition of the building.
• Term and repayment. Terms are often long, with capital and interest repayments; some lenders allow an initial interest-only period while trade is built up.
• Deposit. Expect to contribute a meaningful share of the price from your own resources. Lenders tend to want more equity for pubs than for plain commercial buildings because trading values can move.

A pub mortgage suits an operator with licensed trade experience buying a pub that trades, or will trade, profitably enough to cover the repayments. Typical borrowers include:

• Tenants or leaseholders buying the freehold of the pub they already run, with their own trading figures to show.
• Experienced licensees moving from a tied lease to owning a free house.
• Small pub groups adding another site with a proven management model.
• Hospitality operators buying a pub with rooms or a food-led inn. Our buying a hotel page covers properties where letting bedrooms is the main business.

It is harder for first-time operators with no licensed trade or hospitality management experience, and for closed or failing pubs with no current trade to show. Neither is impossible, but lenders usually want a larger deposit, a strong business plan, experienced staff or a phased approach using short-term funding first. If you are at the planning stage, our guide on how to purchase, fund and open a pub walks through the steps before finance.

Living accommodation

Most pubs include accommodation for the licensee, and lenders generally treat this as part of the commercial operation. If a large share of the building would be your home, or the accommodation is separate enough to be a dwelling in its own right, the loan could fall into regulated territory, which is outside what we arrange. We check this at the outset.

A closed or underperforming pub can be bought with finance, but most lenders will not offer a long-term pub mortgage until the pub is trading again, so the purchase is usually done in two stages. The first stage is short-term funding to buy the site and carry out works, often a bridge or refurbishment facility, sized on the property's value as it stands. The second stage is a refinance onto a pub mortgage once the pub has reopened and built up a trading record, which lenders typically want to see over several months at least.

Lenders on the first stage look closely at the cost and timetable of works, your experience of turning sites around and whether the refinance is realistic. Allow for the time it takes to recruit staff, obtain or vary licences and build a customer base, and keep a working capital buffer for the early months.

Illustration only. This is a hypothetical example with round numbers and no lender committed to it. An experienced operator agrees to buy a closed village pub for £400,000 and budgets £100,000 for a new kitchen and redecoration. A short-term facility funds part of the purchase and works, with the operator's own cash covering the rest. After the pub has traded for a year, the operator applies for a pub mortgage on the strength of the new accounts and repays the short-term loan.

Buying a pub with a mortgage typically takes from several weeks to a few months, depending on the lender, the valuation and the legal work. Indicative terms can come within a few working days in straightforward cases. The specialist valuation and the legal work, including the transfer of the premises licence, stock, fixtures and any staff, are usually the longest stages. If the sale has a tight deadline or comes up at auction, bridging finance followed by a pub mortgage is an option some buyers use.

A pub mortgage is secured by a first legal charge over the freehold pub. Where you buy through a limited company, lenders usually ask for personal guarantees from the directors and may take a debenture over the company's assets, which covers fixtures, equipment and stock as well as the property. Some lenders ask for additional security over other property if the deposit is small. Our guide to debentures and fixed and floating charges explains how this works.

Our guide to commercial mortgage deposits explains why specialist trading property such as a pub usually needs a larger deposit than offices or industrial units.

Pub mortgage costs are made up of interest plus several one-off fees, and pricing reflects the strength of the trade and the operator more than the building alone.

• Interest. Fixed or variable, the variable element often linked to Bank of England base rate.
• Arrangement fee. Charged by the lender, often added to the loan.
• Specialist valuation fee. Licensed trade valuations usually cost more than standard commercial ones.
• Legal fees. Yours and the lender's, including licence transfer work.
• Early repayment charges. Common on fixed-rate deals.

Budget separately for stock, any immediate repairs, opening working capital and purchase taxes, which are not covered by the mortgage. Our commercial mortgage calculator helps you model repayments.

The main alternatives are a leasehold purchase, bridging for a quick or distressed acquisition, or a refurbishment facility for a closed site.

• Bar and pub loans: for buying a leasehold, refurbishing or funding working capital.
• Buying a restaurant rather than a pub? See buying a restaurant or takeaway.
• Refurbishment finance: to buy and reopen a closed pub before refinancing on its new trade.
• Fit-out and refurbishment finance: for kitchen, bar or bedroom upgrades after you own the pub.
• Hospitality business loans: for wider hospitality funding needs.

If letting rooms rather than the bar produce most of the income, compare our guide to hotel mortgages and hotel finance.

Our pub repeat funding case study shows how a pub kept its working capital topped up alongside venue improvements.