All buy-to-let landlords are ambitious, and many want to move into development. A relatively low-risk way of starting out in the development game is to buy a dead pub and convert it into flats.
Hundreds of pubs are closing every year because people are staying at home instead. This creates ideal opportunities for novice property developers, because many pubs are solidly constructed buildings with spacious accommodation that is easily converted into stylish and sellable or lettable flats.
Mark Davis of Winkworth in Kennington, south London, says: "Developers often jump at the chance of buying a pub to convert into residential units for a number of reasons. Firstly, they are normally on a corner plot and therefore have double aspect potential. They typically have high ceilings and big windows, which are also high on tenant wish lists. Perhaps more importantly, though, is their status as part-residential property due to live-in staff and landlords, which makes it easier to apply for planning permission than on a property that is solely commercial."
In London, pubs do not have large gardens, which can limit their appeal to flat dwellers. "Downsides tend to be that pub conversions often have little in the way of outside space or gardens, which means that developers have to create roof terraces," Davis says. "Also, the large windows on the ground floor can make the residents feel a little like they are in a goldfish bowl, so developers may have to install frosted windows."
One major asset of most pubs is a cellar. Davis is selling a former pub in Stannary Street, Kennington, south-east London, which, unusually, has been converted not into flats but one huge house, with four cellar rooms, four bedrooms and two roof terraces. It has two staircases, so it could probably be divided into flats if desired. The place is on the market at £1.9m (020-7587 0600).
Winkworth in Tunbridge Wells is marketing two flats in the old Windmill pub. The developer lives in what used to be the bar downstairs, having converted the former guvnor's residence into two flats above.
The first-floor flat has two bedrooms and an open-plan living area (£225,000), and the second floor flat has one bedroom (£199,500). Neither have any outside space, but the original pub sign and gorgeous green faience tiles with a bas-relief windmill have been preserved.
The specialist estate agent Christie & Co (020-7227 0700) is one of the biggest sellers of pubs, both defunct and going concerns, and it currently has some 200 pubs on the market, on behalf of clients including Enterprise Inns and Admiral Taverns.
According to Colin Wellstead of Christie & Co, pubs used to represent a bargain buy but demand has surged and prices are on the up. "Pubs are less of an opportunity than they were in the 1990s, but there is still huge interest in converting pubs into flats, usually with a restaurant on the ground floor," he says.
Victorian town pubs often present the best layout for conversion. "Pubs with function rooms on the first floor and hotel accommodation above often ceased to use the upper floors because of health and safety legislation, and they are often in a reasonable location near a train station," he says.
Village pubs are less likely to be suitable for conversion and closure may be met with vigorous local protests, Wellstead advises. He has just sold The Normandy Arms in the village of Blackawton, near Totnes in Devon, after just such a protest prevented planning permission being granted for conversion. A developer had succeeded in building a house in the pub garden, but then had to sell the building to a local couple who are reopening it for business.
A classic pub conversion is The Bristol Tavern in Stokes Croft, Bristol, sold by Christie & Co to a local developer for about £300,000. The tall Victorian building is in a shopping street so the ground floor would be unsuitable for living space and is being turned into a trendy café. The upper storeys and the rear of the building are being converted into flats.