Generating income from the country house?
"With the very high levels of Annual Tax on Enveloped Dwellings (ATED) now payable, there are clients who are investigating commercial uses that would not previously have been of interest."
More owners are now entering the market
With the very high levels of Annual Tax on Enveloped Dwellings (ATED) now payable, there are clients who are investigating commercial uses that would not previously have been of interest. As a result we have been involved in some very interesting discussions this year which include corporate events, short term lettings and even filming scenes for Downton Abbey.
Quality or quantity?
There are of course many other country house owners who have long been involved with commercial activities and as a result there is no shortage of competition. As with every market, one size does not fit all, and for those who already have a high profile and marketing and event coordinators, plus the necessary capital investment and infrastructure, viability will require a minimum number of events each year from which to generate a profit. However, quality rather than quantity might be preferable for others, therefore it’s essential to understand the realistic net income to the owner. For example, whilst a filming agreement can be very lucrative, don’t underestimate the time that agreement can take to negotiate and the disruption that a major production can cause. One short scene might require more than 80 people on site, a day to prepare, a day to film and a day then to dismantle and reinstate.
Corporate or private use?
Smaller country houses that are in excellent condition with comfortable modern facilities, in a private location with on-site staff might be better suited to short term stays, particularly from high net worth international families looking for somewhere private and exclusive to go on holiday. For houses with up to eight bedroom suites, a private family might be the ideal market, as corporate users often need a larger space to accommodate everyone. Additional facilities such as an exhibition space, meeting rooms and excellent communications both internet and video, as well as proximity to London and the motorway network, might be essential for corporate users. There are specialist agencies more suitable for corporate markets and separate to those that specialise in private holidays for UHNW families.
Which market to go for?
The first step must be to consider what market a country house is best suited to, what the client base will demand, the potential income, the facilities that are required, the amount of disruption and of course the investment needed. The second step will then be to identify those companies who are best of breed and can access that market, or whether to go public and develop your own marketing material.