Buyers are turning their attentions to pubs and restaurants as the property market keeps struggling with the effects of restrictions on loan facilities.

According to leisure property specialist Savills, the appetite for pub and restaurant assets are due to their smaller lot sizes making them easier to finance.

Announcing the results of its survey into the hospitality property market, Savills said that average prime yields are currently at 6.5 per cent for pubs and at 6 per cent for restaurants, with central London pub investments achieving between 5 per cent and 6 per cent.

The firm forecasts a further 50 basis point improvement in both sectors over the next six months.

Andrew McGregor, director of Savills Leisure Investment said: "As with all property transactions, the strength of covenant is highly influential, but in many cases underlying residual value or occupier demand creates the yield premium.

"Desire to rationalise vast pub estates and pay down huge debt mountains coupled with hardening yields means the PubCos will continue to sell a range of assets."