What is ANP (Actual Net Profit) and why does it matter for pub mortgages?

ANP — Actual Net Profit — is the net trading profit of the pub business after all operating costs, excluding debt service. When a specialist lender or RICS valuer assesses a pub as going-concern trading property, they determine its value primarily by capitalising the ANP (dividing it by a yield multiple) rather than by comparable property sales. For example, a pub generating £80,000 ANP capitalised at a 10% yield would produce a trading valuation of £800,000. This valuation method means the pub's profitability drives its mortgage value — a poorly performing pub may be worth far less than its bricks suggest.

Do I need a premises licence to get a commercial mortgage for a pub?

The pub must have a valid Premises Licence in place for the mortgage to proceed. Most lenders require the licence to be held in the name of the company or individual taking on the mortgage. A Designated Premises Supervisor (DPS) must also be named on the licence — they must hold a personal licence. If you are purchasing a pub and the current licence is not transferable, this represents a significant risk that lenders will flag. Licence complications are one of the most common causes of pub mortgage delays.

What financial documents do lenders need for a pub mortgage application?

Lenders typically require: 3 years of certified trading accounts for the pub business; 12 months of till reports or EPOS data; management accounts for the current trading year; evidence of the Premises Licence; a copy of the lease (if leasehold); details of any machine income (AWP machines, pool tables) which can sometimes be included in ANP; and the applicant's personal financial information including previous property and business experience. A RICS-qualified surveyor who specialises in trading property valuation is appointed by the lender — not a standard commercial valuer.

What deposit do I need for a pub commercial mortgage?

Most specialist pub mortgage lenders require a minimum deposit of 35–40%, meaning they lend at 60–65% LTV based on the trading valuation. For wet-led pubs (predominantly drink sales) or those in marginal locations, the deposit requirement can be 40–45%. Food-led destination pubs with strong ANP and freehold tenure attract the most competitive terms — potentially 65% LTV at lower rates. The deposit is calculated against the lower of purchase price or trading valuation.

Commercial Mortgages for Pubs: Rates, Deposits & What You Need

Q: Are tied pub leases mortgageable?

Tied pub leases — where the tenant is required to purchase beer and other products from the pub company (pubco) — are mortgageable but with a significantly narrower lender pool. The tie affects the tenant's profitability (they pay above-market wholesale prices) and the lease terms are less conventional than a standard commercial lease. Lenders familiar with the pub sector — including Clydesdale Bank, Handelsbanken, and some challenger banks — will consider tied leases, but the LTV is typically lower (50–60%) and the valuation process more complex.

Why Pubs Are a Specialist Commercial Mortgage Category

Pubs are not assessed like standard commercial property. When a lender values an office building, they look at the floor area, location, and rent per square foot. When they value a pub, they look at how much money it makes — because without a viable trading business, the building itself has limited alternative use and therefore limited bricks-and-mortar value.

This is called going-concern valuation. It requires a RICS-qualified valuer who specialises in leisure and hospitality trading properties, not a standard commercial surveyor. The valuation output is the Actual Net Profit (ANP) capitalised at an appropriate yield — and this figure, not the purchase price alone, drives the LTV calculation.

ANP Valuation: How Pub Values Are Calculated

The Actual Net Profit (ANP) is the starting point for trading valuation. It is calculated by starting from gross turnover and deducting:

Cost of sales (beer, food, wine costs)
Staff wages
Utility costs
Insurance, repairs, rates
Licence fees and music licences
Other operating overheads

But not: Debt service (mortgage or rent), depreciation, or owner drawings.

The resulting ANP is then capitalised at a yield (or “multiple”) appropriate to the pub type, location, and quality of trade:

Pub Type	Typical Capitalisation Yield	Meaning
Freehouse, food-led, strong trade	8–10%	Valued at 10–12.5× ANP
Wet-led local, good location	10–12%	Valued at 8–10× ANP
Tied lease, tied pub	12–16%	Valued at 6–8× ANP
Marginal trade, difficult location	15–20%+	Valued at 5–7× ANP

Example: A freehouse generating £95,000 ANP capitalised at 9% = £1,056,000 trading valuation. If the lender offers 65% LTV, the maximum mortgage is £686,000 — regardless of what the vendor is asking.

Licence Considerations

The Premises Licence is the legal authority to sell alcohol. For any pub mortgage, lenders will want to confirm:

The licence is in force and there are no outstanding reviews or conditions that could affect trading.
The licence transfers appropriately to the new owner or operator. In England and Wales, licences transfer under the Licensing Act 2003 — but there are specific notification requirements and timeframes.
A DPS is named — the Designated Premises Supervisor must hold a personal licence. If you are not a licence holder yourself, you will need to name someone who is.
The licensable activities are appropriate for the intended trading model (if you plan to add live music, later hours, or a beer garden, check these are covered).

Some lenders will require sight of the licence before issuing a formal mortgage offer. Involving a licensing solicitor alongside your commercial mortgage solicitor is strongly advisable.

Freehold vs Leasehold Pub Mortgages

Freehold Pubs

Freehold pubs — where you own the building outright — attract the widest lender appetite and best terms. Lenders have a direct charge over real property with genuine alternative use value (conversion to residential in many cases). Rates typically range from 6.5–8.5% per annum, with 60–65% LTV available for strong trading freehouses.

Leasehold Pubs (Free-of-Tie)

A free-of-tie lease gives the licensee the freedom to buy stock from any supplier. These are mortgageable with specialist lenders, with unexpired lease term being the critical factor — most lenders want at least 10 years beyond the mortgage term remaining, and ideally 15–20 years. LTV is typically 50–60% of the leasehold trading value.

Tied Pub Leases

Tied leases — where the tenant must purchase from the pubco — have the smallest lender pool and the lowest LTV availability (50–60% of trading value). The tie reduces profitability (above-market wholesale prices) and the lease terms are less conventional. Specialist lenders including Clydesdale Bank, Handelsbanken, and a small number of challenger banks will consider tied leases.

Typical Pub Mortgage Terms (2026)

Item	Typical Range
LTV (freehold freehouse)	60–65%
LTV (tied or leasehold)	50–60%
Interest rate	6.5%–9.0% per annum
Term	15–25 years
Arrangement fee	1–2% of loan
Valuation fee	£2,000–£5,000 (specialist surveyor)
Repayment type	Capital + interest (repayment); interest-only available for investment
Personal guarantee	Required in most cases

Which Lenders Offer Pub Commercial Mortgages

High-street banks (NatWest, Lloyds, Barclays) occasionally fund pub purchases but apply strict criteria and are selective about regions and property quality. Specialist lenders and challenger banks active in the pub sector include:

Clydesdale Bank / Yorkshire Bank — experienced in licensed trade lending
Handelsbanken — relationship-based, good for established operators
Shawbrook Bank — specialist commercial and semi-commercial
Aldermore — hospitality sector appetite
NatWest — selective but accessible for established operators with strong accounts

Because pub lending is highly relationship- and experience-driven, using a commercial mortgage broker who specialises in licensed trade will dramatically improve your access to the right lenders and improve the quality of your application.

Can I get a commercial mortgage for a pub?

In short