London & Country highlights and expectations for 2018

The TBS team have negotiated deals this year ranging from a very special country cottage at £800,000, a pied-a-terre in Spitalfields and a house in Knightsbridge through to a large residential estate in excess of £20m.

But 2017 has been about off market deals–in excess of 70% of our country purchases (up from 50% in 2016) have not been publicly available. The reason has been a conspicuous shortage of stock in all price brackets and throughout all regions and while first impressions in London suggest a good amount of stock, a lot is ambitiously priced and seeking those with stand-out value has proved challenging.

Noticeable this year has been in increase in international clients buying at the very top of the market (upwards of £10m) including ongoing interest from China, renewed interest from and, to a lesser extent, Russia. Both have been driven by the weakness of the pound and global instability. International buyers are more sensitive about Brexit in London than the country, although a number still wish to maintain a base in the capital.

With prices, vendors still need to absorb the impact of either Stamp Duty and wider economic concerns. In London, there are signs that this is changing and we’ve negotiated deals well below unrealistic asking prices. The country market is still catching on, although there are signs that the Home Counties are digesting this new reality.

The exceptions to all these rules are the best-in-class properties. Where they have been sensibly priced, we’ve often seen competitive bidding. In some of our country house transactions, this has then led to prices being pushed up by 30%. This underlines a powerful flight to quality and we anticipate this will set the tone for 2018.

Looking forward to next year, we believe lack of supply will continue but we hope that the nature of the progressing Brexit negotiations will give clarity allowing people to make decisions with regard to their property purchase which will feed through to the market in general. We expect that price sensitivity that we’re beginning to see in London and the Home Counties will have filtered out to the wider shires by the third quarter.

How to generate income from your Cotswold or Country Property – the holiday let option

Since the financial crash of 2008, the numbers of those choosing to holiday in the UK has grown exponentially and figures suggest that this is likely to rise further as we nudge towards Brexit. Added to this, there is a growing trend for people to want to take shorter but more frequent breaks–“nano breaks” to use the jargon–rather than the traditional two-week long holiday in August.

This confluence of events has come together to create a marketplace for holiday properties in key areas of the countryside, including the Cotswolds. Matched with an increasing appetite for owners to make their second homes pay their way, more and more clients are taking up the opportunity to rent out their properties when they are not using them.

Here we talk to Chris Grimes of holiday letting agency Manor Cottages–the largest operator in the Cotswolds–about the trend.

“We took over Manor Cottages in 2005 when it was a small start-up established by a local couple. Since that time, and especially following the financial crisis, the supply and quality of holiday properties has grown enormously—today we have 250 on our books today ranging from one-bedroom converted barns right through to properties able to accommodate up to 30 guests. Between 60% and 70% of our business comes from those who are London based and are looking for a countryside break in the Cotswolds, Bath and the Wye Valley.

As a consequence of this growth, owners can no longer dictate the terms of rentals; the control has now shifted to the consumer so owners are having to be more flexible with things like changeover days. It’s now far more popular to take mini breaks which plays well for areas like the Cotswolds where there is no coast. Here people come to enjoy the gastro pubs, Daylesford and the wonderful countryside—what they are looking for, is a typical Cotswold-style property to stay in.

We vet all the properties carefully to make sure they are the right standard for us. There is no common theme that unites all our landlords—we have everyone from a young couple who have just bought their second home and have asked us to manage and let it while they aren’t there to professional landlords who are happy to look after their portfolio but use us to bring in clients. We have farmers who let out their converted barns or stables and those who are retired now and want to travel without the hassle of organising lettings–and then every configuration in between. Of the 250 properties in the Cotswolds, we manage about 70 of them in house which includes everything from housekeeping and laundry through to what we call crisis management—that is tenants who arrive and can’t open the key box through to water coming through the roof.

That’s the main difference between us and what we call in the trade OTAs (online travel agents) which include Airbnb. Owners are much more prepared these days to open up their homes to others to help cover the running costs and Airbnb has been incredibly successful at normalising that concept. But we’re on the ground, bring a degree of heritage, provide a personal service and above all know the Cotswolds inside out. That works for both tenant and owner. People like speaking to people; it brings peace of mind.

While no one is guaranteed any bookings, it can provide a useful income stream for owners of Cotswold houses. The most successful lets tend to be those that typify what people conjure up in their mind when imagining the Cotswolds—mellow yellow stone built houses and cottages set in rolling hills near pretty villages with excellent pubs. Depending on the time of year, a one-bedroom property might bring £60 and £100 a night while a four-bedroom, classic Cotswold stone farmhouse would generate circa £300 a night gross.” Manor Cottages 01993 824 252, manorcottages.co.uk

Harry continues:  “Clients are becoming increasingly interested in the ability to raise additional income through the holiday option either by renting out their cottage or annexe or, if they aren’t full-time occupiers, the entire house. It gives owners flexibility, it reduces the time a property remains unoccupied and it’s possible to generate £10,000 to £20,000 plus per year.

Working with Chris is very helpful. Not only can he can come and advise clients as to how much income they are likely to make through holiday lettings but also what to consider when furnishing the house and how to overcome obstacles such as storing personal items when the property is being let.”