The value of pub properties has slumped by a third in the past two years, a report shows, placing further pressure on the stretched balance sheets of big pub groups Punch Taverns and Enterprise Inns.

Christie and Co, the property adviser and agent which specialises in the leisure sector, publishes its annual survey today, which reveals some of the reasons why the sector is in such turmoil.

Pub property prices are down 29 per cent from their peak at the end of 2007, losing a fifth of their value last year alone.

That is making life tough for Punch and Enterprise, which are loaded with debt that is partly backed by the value of their property portfolios.

Both have been selling hundreds of pubs as they seek to shed loss-making boozers and pay down debts.

Critics of the sector, including City analysts, say the pub companies have not written down the value of their estate to reflect the reality of how much less the pubs would fetch if they were sold.

Punch, which has debt of £3.4 billion compared with a stock market value of less than £500 million, declined to comment but points out that it values its pubs on the basis of how profitable they are, rather than merely what the buildings are worth.

Neil Morgan, head of pubs at Christie, says the market for buying pubs remains depressed. “Prospective buyers continued to find it hard to raise finance, whilst others continued to play a waiting game, to see when values would bottom out.”

Smaller pub companies such as Geronimo and Shepherd Neame have been snapping up pubs from the biggest players to expand their estates.