PUB values are on the up because of a shortage of properties for sale, estate agents have revealed.

One factor for the rise in value was the hot summer which meant many publicans enjoyed a good year's trading and were under no pressure to sell.

The shortage of pubs, particularly freehold freehouses, has continued in 2004 with the result that pub values are still rising as demand exceeds supply. They increased by an average 6.2 per cent last year.

Freeholds continue to be much in demand from both independent and group purchasers.

Richard Payne, negotiator of licensed property agents Christie and Co, said: "Britain's economy at the moment ensures the right economic environment for publicans to trade successfully, which may once again discourage many from selling their properties, even though demand is high and values are rising.

"We are also seeing continued demand from buyers for public houses, including those seeking a change in lifestyle."