Category: Advice & Articles

Types of Commercial Properties

Posted on by Stewart Hindley

In the vibrant and dynamic world of business, commercial properties serve as the beating heart of various industries. Whether you are an ambitious entrepreneur starting a new venture or an established business owner looking to expand, understanding the different types of commercial properties available in the UK is crucial. In this article, we will explore the diverse range of commercial properties and provide valuable insights to help you choose the right property for your business needs.

What are the different types of commercial properties?

Commercial properties can be classified as either full-commercial or semi-commercial.

Full commercial properties refer to properties that operate completely commercially, such as offices, warehouses, dental surgeries, factories and guest houses. Semi-commercial properties, also known as mixed-use properties, are used for residential as well as commercial purposes, such as flats above a row of shops.

Commercial properties can also be grouped based on what kind of activities they’re used for, such as offices, industrial, retail, leisure and healthcare.

Office Spaces

Office spaces are the backbone of professional services, administrative operations and corporate environments. They come in various sizes and layouts, from small offices in shared workspaces to large, purpose-built corporate headquarters.

Key considerations when selecting an office space include location, accessibility, amenities and parking facilities.

Industrial Units

Industrial properties are tailored to meet the needs of manufacturing, warehousing, logistics and distribution sectors. These properties are characterised by their large floor areas, high ceilings, loading bays and proximity to transportation networks.

Because industrial units are essential for businesses involved in production, storage and the movement of goods, location, transportation links, accessibility for heavy vehicles and the availability of storage facilities are vital factors when choosing an industrial property.

Retail Establishments

Retail properties are where commerce and consumers converge. They encompass a wide range of premises, including shops, showrooms, shopping centres and high street stores. The UK boasts a rich tapestry of retail spaces, from small independent boutiques to large shopping malls.

When selecting a retail property, factors such as footfall, demographics, competition, parking and accessibility should be taken into account. The location should align with your target audience and the nature of your products or services.

Leisure Facilities

Leisure properties cater to businesses in the entertainment, hospitality and leisure sectors. These include hotels, restaurants, pubs, cinemas, fitness centres and recreational venues.

Considerations when choosing a leisure property include location, accessibility, proximity to amenities, parking facilities and the potential for footfall. Understanding the target market and their preferences is vital for success in this sector.

Healthcare Properties

Healthcare properties, encompassing hospitals, clinics, medical offices, dental practices and care homes, play a crucial role in delivering medical services to the community. These properties must meet stringent regulatory standards and provide suitable infrastructure for medical professionals and patients.

Factors to consider when choosing a healthcare property include location, proximity to other healthcare providers, accessibility, parking and compliance with regulatory requirements.

Choosing the Right Property for Your Business

Choosing the right commercial property for your business requires careful consideration of various factors. By thoroughly evaluating your needs, conducting market research, seeking professional advice and assessing the property’s suitability, you can make an informed decision that sets the stage for future success. Consider the following factors when making this important choice:

Location

Ensure the property is conveniently located for your target market, employees and suppliers. Accessibility to transportation links and proximity to amenities should also be considered.

Size and Layout

Assess your current and future space requirements to ensure the property can accommodate your business’s needs. Consider office space, storage areas, customer areas and production facilities.

Budget

Determine a realistic budget for purchasing or leasing a commercial property. Consider not only the upfront costs but also ongoing expenses such as rent, maintenance, insurance and business rates.

Infrastructure and Facilities

Evaluate the existing infrastructure and facilities to determine whether they meet your business requirements, for example, loading bays, secure access or refrigeration units.

Legal Considerations

Seek professional advice from solicitors or commercial property experts to navigate legal aspects such as lease agreements, licenses and permits and to ensure compliance with local planning and building regulations.

Future Growth Potential

Consider the scalability and flexibility of the property. Will it accommodate your business’s growth and expansion plans? Assess the potential for alterations, extensions or additional space if needed in the future.

Market Research

Conduct thorough market research to understand the demand and competition in the area. Identify if there is a suitable customer base for your business and analyse the potential for growth and profitability.

Due Diligence

Before finalising any property, conduct thorough due diligence. Inspect the property for any structural issues, assess its condition and review utility systems, such as plumbing and electrical systems.

How can Stewart Hindley help?

As commercial property experts, we can provide you with valuable insights and options when it comes to buying your first or next commercial property. Get in touch to find out how we can help you.

Most Popular Types of Beer in the UK

Posted on by Stewart Hindley

Beer holds a special place in British culture, weaving through the nation’s history and social fabric.  Many breweries have been producing beers for generations, preserving traditional recipes and techniques. Brewer and pub chain Greene King dates back to 1799 and offers a range of popular beers, John Smith’s started in 1852 and produces the highest-selling bitter in the UK and relatively new craft beer brewer Brewdog has made a huge name for itself in less than two decades.

Festivals and events dedicated to showcasing beers, such as the Great British Beer Festival, Oktoberfest-inspired festivals and ale trails, celebrate this heritage and attract enthusiasts from around the country. These gatherings showcase the diversity of British brewing and allow people to sample a wide range of beers.

Beer also holds its own place in British cuisine: traditional pub fare, such as fish and chips, bangers and mash and steak and ale pie, is often complemented by a perfectly matched beer. From light lagers to robust stouts, beer enhances the flavours of the food, creating a delightful dining experience.

What are the most popular types of beer in the UK?

Research from Statista found the most popular beers in the UK are Lager (71%), IPA (46%), Pale Ale (39%), Bitter 39%) and Stout (30%) – these are the beers every pub owner will want to keep a steady supply of to ensure happy and returning customers.

Lager

Lager, a refreshing and smooth beer, is widely consumed throughout the UK and is characterised by its pale colour, light-to-medium body and clean, crisp taste. Lager is typically fermented at lower temperatures, resulting in a smoother and less fruity flavour profile.

The popularity of lager shot up in the UK during the latter half of the 20th century, becoming a go-to choice for many beer enthusiasts. Popular lager brands among British drinkers include Carling, Stella Artois and Foster’s.

IPA (India Pale Ale)

Originating from the British Empire’s colonial past, India Pale Ale (IPA) is a beer style renowned for its hop-forward character and strong bitterness. Historically, IPAs were brewed with extra hops and higher alcohol content to withstand long journeys from Britain to India during the 18th and 19th centuries.

Today, IPAs in the UK come in various iterations, ranging from classic British-style IPAs with floral and earthy hops to American-inspired IPAs with bold citrus and tropical fruit flavours. Examples of popular British IPAs include BrewDog Punk IPA and Beavertown Gamma Ray.

Pale Ale

Pale Ale, a staple in British brewing, balances the malt-forward character of traditional ales and the hop bitterness found in IPAs. Pale Ales differ from IPAs in that they have more body and a medium intensity while IPAs are drier in the mouth and have a more pungent aftertaste. It features a moderate hop profile, offering a pleasant blend of floral, fruity and earthy flavours.

The colour of pale ales can vary from golden to amber and they have a malty backbone. Notable examples of Pale Ales include Fuller’s London Pride, Timothy Taylor’s Landlord and Adnams Ghost Ship.

Bitter

Bitter is an iconic beer style that holds a special place in British hearts. It is known for its distinctively hoppy and bitter taste, often accompanied by a caramel or biscuit-like maltiness. As well as ordinary bitters, punters can also opt for stronger versions like best bitters and extra special bitters (ESBs).

Often served on a cask, bitters have a unique and more complex flavour experience. Noteworthy bitter brands include Fuller’s ESB and Greene King IPA.

Stout

Stout, a rich and dark beer style, has a significant following in the UK. It boasts a robust malt profile, offering flavours of roasted coffee, chocolate and sometimes even hints of dried fruit. With its velvety texture and full-bodied nature, stout is a popular choice for those seeking a more intense beer experience.

Perhaps the world’s most renowned stout, Guinness, has become synonymous with the style. Other notable examples include Samuel Smith’s Oatmeal Stout and Fuller’s London Porter.

Interested in owning your own pub?

If you are interested in running your own pub, Stewart Hindley can help. We are specialists in helping people realise their dreams of owning their own pub by building pub mortgage and finance applications. Get in touch to find out how we can help you on your pub ownership journey.

Can I get a mortgage for a B&B, Guest House or Hotel when B of E base rates are high?

Posted on by Stewart Hindley

The answer is yes! Whilst the recent rise in Bank of England base rates can be described as unprecedented, in reality, borrowing money is still cheap in comparison to what it cost 7 or 8 years ago when base rates were at a similar level.

The determining factor is not whether you can afford higher base rate, but whether or not the business can afford to pay the higher base rates, when the lenders’ interest margin is added, this is commonly known as the lenders’ pay rate which is invariably based on the lenders Standard Variable Rate (SVR) which tracks the prevailing Bank of England base rate.

With Bank of England base rates expected to peak by the end of May to 4.5%, they are then expected to decline to circa 2.5% / 3% by the Autumn making for more affordable lending position.

When buying a B&B, Guest House or Hotel you need to consider the businesses Trading Profit, not the Net Profit, as the Trading Profit is before Loan Interest, Depreciation and other Exceptional or Extra Ordinary Expenditure.

Lenders will consider the Trading Profit as the means to service their commercial mortgage, on a full repayment basis over the term of the loan, when considered against the Bank of England prevailing base rate and their margin and when stress tested to allow for future rises in base rates.

So, the question is, do you buy a B&B, Guest House or Hotel when base rates are at a recent all time high, or do you wait until they reduce and possibly lose out on your dream of a life stye business.

The answer is, that when lending is considered expensive, due to base rate increases, this leads to a stagnation in market sales activity due to perceived affordability issues.

Sales Agents and Vendors then become concerned if their pricing is reflective of the market and transactional lead times.

This provides a unique and time limited opportunity to acquire a B&B, Guest House or Hotel with a realistic price reduction ,given the uncertainty in the market and the desire of the vendors’ to move on, given that increases in base rates also have an impact on the cost of living, which also increases  residential mortgage payments which is a good example, as individuals and household money available for discretionary expenditure, such weekends away, or holiday stays, becomes constrained or is perceived to be so, which is a mind set and doesn’t always reflect reality.

For your peace of mind, no reputable broker would recommend a mortgage that wasn’t affordable when considered on prevailing base rates, moreover lenders only consider after stress testing, to ensure that their loan is serviceable even if base rates went to 10% which is as much about protecting their best interests as it is much as yours.

If you’d like to discuss whether or not a commercial loan is affordable to purchase a B&B, Guest House or Hotel, get in touch with one of our expert brokers for a impartial and no obligation chat.

What is the difference between staying at bed and breakfasts and guest houses?

Posted on by Stewart Hindley

One of the biggest questions that prospective purchasers ask is what is the difference between a B&B, a Guest House and a Hotel. Chris McDonagh, Senior Partner at Stewart Hindley, explains the differences.

Firstly, there is no legal dividing line between these businesses and no generally accepted rule either.

VisitEngland calls both B&Bs and Guest Houses ‘guest accommodation’, and AA Hospitality have decided that an establishment with ‘Hotel’ in its name should be treated as a Hotel. So, to say the least, the distinction between these terms is a grey area.

Star Rating Schemes

There is, however, a sharp distinction in the star rating schemes between ‘guest accommodation’ and ‘hotel’, with star ratings for each being decided on very different criteria. Don’t expect a 4-star B&B to have the same facilities as a 4-star hotel. It was possibly clearer when the former used to be awarded diamonds, and the latter stars.

The Size of the Establishment

As a broad rule of thumb, though, B&Bs tend to be smaller – most being under 10 rooms or so, and Guest Houses larger (often roughly 10-25 rooms). None of those dividing lines are exact though – and you will find 15-room B&Bs and eight-room Guest Houses (and indeed ‘hotels’).

How any individual establishment is named is in most cases historic, rather than the result of a measured decision.

Boutique Establishments

Meanwhile, the term ‘Boutique Hotel’ or ‘Boutique B&B’ is relatively new and has no official definition. It is used by owners who want to emphasise that their property is stylish and high quality, even if small. It tends to indicate design-led establishments, but it is a highly subjective judgement.

Serviced Apartments

There is a recent trend to converted traditional B&Bs and Guest Houses to serviced apartments, that generally offer larger rooms, sometime studios with small kitchenettes, to provide for longer stays. There is minimal host intervention with bookings taken on-line with automated access via a smart phone or electronic key pad.

These stays are graded on convenience rather than on guest host interaction which works for some but not for all dependent on the type of stay. Business travellers generally prefer minimal interaction whereas vacationers like the personal meet and greet service.

What makes B&Bs and Guest Houses Special?

The common factor for B&Bs – is that they are owner-managed, and not part of a chain. That means that they can offer the sort of individual welcome and service, local knowledge and home-cooked breakfast that larger, purely commercial businesses can’t replicate.

Consumers love these added extras, with millions of guests rating B&Bs and Guest Houses higher for guest satisfaction than hotels.

 

Restructuring a commercial loan and cash flow

Posted on by Stewart Hindley

The $64,000 question is, should you sit tight and ride out the cost-of-living crisis and the ensuing economic storm, which is inevitably due to break in the coming months, that will surely lead to increasing demands on cash flow.

Or do you take a longer-term view and look to restructuring your existing loan on a standard variable rate to ensure that my payments are more affordable in the immediate and medium term when Bank of England based rates return to more affordable levels.

I guess the answer is, do you have a significant cash buffer in reserve to meet a down-turn in your business’s revenue and the higher short-term cost of borrowing, or do you look to restructure on more affordable terms, which doesn’t necessarily mean a lower rate of intertest from another lender.

Cash is king

To put it simply, the colloquial phrase “cash is king”, is so relevant in today’s economic times as businesses do not become unviable due to a decline in revenue or indeed an increase in direct and in-direct costs, whilst these factors may undoubtedly have an impact on the bottom line, it is more often than not the case, that businesses run out of cash, be it due to higher loan servicing costs or debtors not paying when due.

Debtors are a credit and bookkeeping function, under your direct control, whereas the loan servicing challenges more often than not are in the lender’s domain, as they have absolute control of your day-to-day cash facilities.

CFADS – cash flow available for debt servicing

When a lender recognises that the cash available from your business for servicing their loan otherwise known as CFADS (Cash Flow Available for Debt Servicing) is insufficient, the alarm bells start ringing, especially so if a request for an overdraft or an increase the existing overdraft facility has been requested which is often denied, especially so when businesses are in the retail, hospitality or leisure sectors, were customers in effect pay for services as they go.

How do I improve my business cash flow?

So how do you improve your cash flow? Well, there are a number of options available from requesting a capital repayment holiday from your lender, which will probably draw unwarranted attention to your cash flow problem, so not desirable, to refinancing your loan with another lender over a longer term, either on an interest only or part interest and capital, or a full repayment basis, perhaps with seasonal payment options, to take out the peaks and troughs of your revenue.

As with all of these challenges its best to speak to a professional firm of loan brokers, such as Stewart Hindley, who are experienced in your sector who can offer a solution to your cash flow difficulties before your lender takes action.

 

 

How to Manage Commercial Loan Repayments

Posted on by Stewart Hindley

In these uncertain economic times, compounded by the increase of Bank of England base rates, which have resulted in an increase of the  cost of borrowing and loan repayments, there is a unprecedented pressure on all businesses to make ends meet, especially so when it comes to managing their loan repayments. The question is, how can I manage my businesses loan repayments when there simply isn’t any spare capacity in my cash flow to do so?

Many business owners have experienced sleepless nights worrying about repaying their loan, this problem which if not managed, can result in business failure.  So how can you avoid this potentially disastrous situation? Surprisingly the solution is relatively straight forward. There are a number of options available to business owners like you.

Communication with the lender is key

The first and most important thing is to communicate with your lender. Advise them as soon as possible that you have a problem, ideally well before the debt debit for your loan is returned as unpaid as this is often followed by a call from your lender, which puts you on the back foot as it indicates that you are not in control of your business finances and making for spur of the moment implausible excuses. This could lead to the transfer of your loan account to your lenders business support team, this isn’t a place where you need to be and worst case this transfer can lead to recoveries action.

How you do maintain lender confidence in your business?

It is important to understand that the lender is there to help you wherever possible, they have a mandate under their terms of business to do so. Explain succinctly how the problem has arisen, which could be the after effects of the pandemic or some equally significant situation such as an unexpected loss of revenue, or perhaps a personal family matter.  The lender will want to understand how long the problem is likely to last for and what you are going to do about it, all of which can represent challenges for you and the lender.

Short term cash flow resolutions for a commercial loan

One instance may be a short-term cash flow situation which can be resolved by micro managing your cash flow to meet loan repayments. If there isn’t the scope within your business to do so, then there are various other ways that can improve the situation. For example you could request a loan repayment holiday for 3 months to provide you with some breathing space to remedy matters, alternately, request that for a period of time, say 12 months, that your loan reverts to interest only payments or just capital repayments and finally ask for an extension of the loan term to make your loan repayments more affordable and in line with your businesses cash flow.

These steps will help your business survive but will also improve you relationship with your lender as they always appreciate transparency.

If you feel somewhat daunted and possibly embarrassed dealing with your lender, a specialist finance intermediary, such as Stewart Hindley & Partners can act for you to secure the best possible outcome. Get in touch with us today.

Interest Rates and Hospitality Loans

Posted on by Stewart Hindley

I think it’s fair to say that there is never a right or wrong time to buy a B&B, Guest House or Hotel, and in these uncertain and challenging times perhaps now is definitely not the right time to buy.

However, despite economic sentiment there’s really never been a better time to buy these lucrative businesses as market sentiment is softening due to the staycation market returning to pre pandemic norms and vendors being more realistic about pricing.

What are the effect of high interest rates?

“What about high interest rates?” I hear you say, “Are lenders still willing to lend despite the high interest rates?” which are actually driven by Bank of England base rate and not the lenders themselves.

Whilst the Bank of England base rate has increased from an unprecedented 0% to 4.5%, this is recognised as a short-term expedient to reduce inflation. Most financial pundits are forecasting base rates at 2% by the autumn making funding more affordable and very near recent historic lows. It wasn’t that long ago in 2007 (pre the financial crisis), base rates were 5.5%, so in the scheme of things a 4.5% base rate isn’t unprecedented.

Unfortunately current market sentiment more often than not is driven by the MSM (mainstream media) and has resulted in a cautious approach for lenders, sellers and purchasers alike. Lenders are concerned that commercial debt must be serviceable in real terms also when stress tested and sensitised to allow for future increases in base rates, the latest hike being a case in point.

Sellers are concerned that higher base rates will mean that purchasers will stand back from buying their businesses until base rates returns to recent norms of 0% which they won’t. Purchasers will just take the view that borrowing is unaffordable and as a consequence lenders won’t consider funding, so will also sit on their hands until base rates reduce to recent norms. All of this causes transaction stagnation in the market be it hospitality or other sectors.

How is the trading profit factored into a loan?

In the real world, the cost of borrowing is simply factored into the borrowing and transaction process. Lenders have always considered on this basis and the $64,000 question… Is the loan affordable when considered in relation to the trading profit outcome?  As businesses are invariably priced on their trading profit attainment, the answer is a resounding yes!

The challenge is how the trading profit is assessed and calculated for the purposes of borrowing and this is where an experienced hospitality and leisure broker such as Stewart Hindley & Partners can make a significant difference in achieving a successful and timely outcome.

If you want to buy a B&B, Guest House or Hotel, don’t be put off by high base rates.

Whilst the market for these businesses continues to represent excellent value, once base rates reduce and lending becomes more affordable again, the sellers resolve to secure their market price will strengthen, which means less opportunity to secure a price reduction.

As it takes some 3 to 4 months from enquiry to drawn down, the lenders interest rate pricing will reflect the anticipated reduction in base rates by the autumn, making for a commercial affordable lending proposition.

Get it touch with us today for an expert opinion.

The Use of Technology in the Hospitality Industry

Posted on by Stewart Hindley

Technology has been a game-changer in the hospitality industry. From booking accommodations to making payments, technology has transformed the way we experience hospitality. In this article, we will explore some of the new technologies that are helping the hospitality industry and what the future holds for technology in this sector.

New Technology in Hospitality

Contactless technologies are more popular than ever, whether that is paying via contactless means at a restaurant (either by using a contactless card or paying for their meal from their table through an app or browser), or contactless check-in and check-out at a hotel or B&B, i.e. checking in/out of their accommodation without interacting with staff members. This technology has become increasingly popular during the COVID-19 pandemic as it allows guests to maintain social distancing and reduces the risk of transmitting the virus. Contactless services are made possible by technology such as facial recognition, mobile apps and kiosks. As well as being more hygienic and often a quicker experience for customers, these contactless tactics allow staff to focus on other tasks, saving time and money.

Another technology that is helping the hospitality industry is chatbots. Chatbots are AI-powered bots that can assist guests in booking reservations, answering frequently asked questions and even ordering room service. Chatbots can be integrated into the websites and mobile apps of hotels, restaurants and tourist attractions, making them easily accessible to guests and customers. This technology not only improves guest experiences but also helps businesses save time and money by reducing the need for staff to answer repetitive questions.

Technologies such as virtual reality and augmented reality are also becoming more prevalent in the hospitality industry. Virtual reality allows guests to experience a hotel or resort before they even arrive, giving them a better understanding of the property and what it has to offer. Augmented reality can also be used to enhance guest experiences, such as by providing interactive maps or virtual tours.

The Future of Technology in Hospitality

As technology continues to evolve, we can expect to see even more advancements in this sector. One trend that is likely to continue is the use of AI and machine learning. These technologies can help hotels, resorts, B&Bs and other businesses personalise guest experiences, anticipate guest needs and even predict future demand.

Another technology that is likely to become more prevalent is the Internet of Things (IoT). IoT technology can be used to create smart rooms that can adjust lighting, temperature and other factors based on guest preferences. This technology can also be used to track guest preferences and behaviours, allowing hotels to tailor their services to each individual guest. IoT isn’t just customer-facing either; all sorts of hospitality businesses can use integrated technologies to, for example, automate stock counts and to make heating and lighting more efficient throughout their sites.

Finally, we can expect to see even more contactless technologies in the hospitality industry. As guests become more accustomed to contactless experiences, hospitality providers will need to continue to adapt to meet these expectations. We can expect to see more mobile apps, kiosks and other technologies that allow guests to interact without physical contact.

Businesses that are able to adapt to these technologies will be better equipped to provide exceptional guest experiences and stay ahead of the competition.

How can Stewart Hindley help?

If you’re thinking about getting into the hospitality industry, or want to expand your current business, get in touch with a member of our skilled and experienced team who will help you achieve your goal.

The Role of Pubs in the Community

Posted on by Stewart Hindley

Pubs have been a vital part of the social fabric of British communities for centuries. A pub is not just a place to grab a drink, but it also serves as a gathering place for people to come together, socialise and connect, promoting social cohesion and reducing social isolation. They provide a safe and welcoming space for people of all ages and backgrounds, where they can share experiences, stories and ideas.

They also play a vital role in creating a sense of community and belonging. Pubs provide a space for people to come together and build relationships based on shared interests and experiences. Regular patrons of a pub often form close-knit communities, where everyone knows each other by name, creating a sense of familiarity and trust.

As well as this, pubs provide a platform for cultural exchange and celebration. They serve as a venue for live music, poetry readings and comedy shows, promoting local talent and creativity. Pubs often celebrate cultural events such as St. Patrick’s Day or Burns Night, bringing people of different backgrounds and cultures together to share in the festivities.

How Can a Pub Use the Local Community to Be Successful?

To be successful, a pub needs to have a strong connection with the local community. Pubs can utilise the local community in many ways, including:

Community outreach and supporting local events

Community outreach programs, such as sponsoring or hosting local events, are a great way for pubs to get involved with their local communities. These may include charity fundraisers, quiz nights, live music and sponsoring local sports teams. This helps to build a sense of community and also attracts customers.

Using local suppliers

Pubs can source their products from local suppliers, such as breweries and farmers. This not only supports the local economy but also provides customers with unique and authentic experiences.

Engaging with customers

Loyalty programs, feedback forms and social media can help pubs engage with and take tips from their customers. This helps to build a loyal customer base and also enables the pub to tailor its services to meet the needs of the community.

Providing employment opportunities

Pubs can provide employment opportunities for local people, including bartenders, servers and chefs. This helps improve employment rates and supports the local economy.

What Is the Social Value of Pubs?

Serving as a meeting place for people from all walks of life, promoting social cohesion and reducing social isolation, pubs have a significant social value in the community. Here are some of the social values of pubs:

Promoting social interaction

Pubs are places where people can socialise, relax and enjoy each other’s company. They provide a safe and welcoming environment for people to meet and connect.

Supporting mental health

Many people find comfort and solace in pubs as a space for people to talk and share their problems. They can also offer support groups and resources for people struggling with mental health issues.

Preserving cultural heritage

Pubs are an important part of British culture and they help to preserve the country’s cultural heritage. They provide a space for traditional activities, such as pub quizzes, darts and live music.

Encouraging responsible drinking

Although many may first think of alcohol when they think of pubs, they can promote responsible drinking by offering non-alcoholic drinks, food and water. They can also offer advice and resources for people who may be struggling with alcohol addiction.

What Role Do Pubs Play in British Culture?

Pubs have played an integral role in British culture for centuries. They are often seen as the heart of the community and have a rich history and tradition. Here are some of the ways in which pubs have shaped British culture:

Traditional activities

Many traditional British activities, such as darts and quizzes, are best enjoyed in pubs, and pubs have also been the birthplace of new cultural trends, such as the punk music movement.

Meeting places

Pubs have been a place for people to meet, socialise and discuss important issues. They have been the venue for political meetings, literary circles and artistic movements.

Culinary experiences

British cuisine has been influenced by pubs, with dishes such as fish and chips, bangers and mash and steak and kidney pie becoming iconic British meals. Pubs also provide a space for people to enjoy traditional British beer and cider.

Historical landmarks

Many pubs in the UK have a rich history, with some dating back centuries. They have often been the site of significant events and have become historical landmarks in their own right.

How can Stewart Hindley help?

If you’re considering buying and running your own pub, and becoming an important part of a British community, get in touch with a member of our skilled and experienced team who are on hand to help you on your way to buying your dream pub.

Buying a B&B, hotel or guest house – how much does the interest rate matter?

Posted on by Stewart Hindley

Good time to buy a hotel, b&b or guest house?

I think it’s fair to say that there is never a right or wrong time to buy a B&B, Guest House or Hotel, and in these uncertain and challenging times perhaps now is definitely not the right time to buy.

However, despite economic sentiment there’s really never been a better time to buy these lucrative businesses as market sentiment is softening due to the staycation market returning to pre pandemic norms and vendors being more realistic about pricing.

“What about high interest rates?” I hear you say, “Are lenders still willing to lend despite the high interest rates?” which are actually driven by Bank of England base rate and not the lenders themselves.

Whilst the Bank of England base rate has increased from an unprecedented 0% to 4%, this is recognised as a short-term expedient to reduce inflation. Most financial pundits are forecasting base rates at 2% by the autumn making funding more affordable and very near recent historic lows. It wasn’t that long ago in 2007 (pre the financial crisis), base rates were 5.5%, so in the scheme of things a 4% base rate isn’t unprecedented.

Current market lending sentiment

Unfortunately current market sentiment more often than not is driven by the mainstream media and has resulted in a cautious approach for lenders, sellers and purchasers alike. Lenders are concerned that commercial debt must be serviceable in real terms also when stress tested and sensitised to allow for future increases in base rates, the latest hike being a case in point.

Sellers are concerned that higher base rates will mean that purchasers will stand back from buying their businesses until base rates returns to recent norms of 0% which they won’t. Purchasers will just take the view that borrowing is unaffordable and as a consequence lenders won’t consider funding, so will also sit on their hands until base rates reduce to recent norms. All of this causes transaction stagnation in the market be it hospitality or other sectors.

In the real world, the cost of borrowing is simply factored into the borrowing and transaction process. Lenders have always considered on this basis and the $64,000 question… ‘Is the loan affordable when considered in relation to the trading profit outcome?’  As businesses are invariably priced on their trading profit attainment, the answer is a resounding yes!

How can a specialist commercial loan broker help?

The challenge is how the trading profit is assessed and calculated for the purposes of borrowing and this is where an experienced hospitality and leisure broker such as Stewart Hindley & Partners can make a significant difference in achieving a successful and timely outcome.

So, if you have the desire to buy a B&B, guest house or hotel, don’t be put off by high base rates.

Whilst the market for these businesses continues to represent excellent value, once base rates reduce and lending becomes more affordable again, the sellers resolve to secure their market price will strengthen, which means less opportunity to secure a price reduction.

As it takes some 3 to 4 months from enquiry to drawn down, the lenders interest rate pricing will reflect the anticipated reduction in base rates by the autumn, making for a commercial affordable lending proposition.

Get it touch with our hotel finance specialists today for an expert opinion.

 

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