Equestrian rental property in demand

In August last year, specialist agent George Windsor Clive predicted that the equestrian property market would see a sharp increase in farm buildings to let.

“A lot of farmers are doing other things with the land and this has thrown up plenty of good dairy buildings,” he said at the time. “I think this is going to mean there’ll be more good sites for stabling.”

Six months on, his foresight proved right. Plenty of redundant farm buildings have appeared on the market, especially after the government’s new planning policy statement encouraged planners to help farmers diversify into equestrian activities.

However, this newly-found availability has done little to allay demand and reduce the pressure on rents.

“The equestrian rental market will be as buoyant as ever, with many applicants for a few really classy properties,” says Windsor Clive.

This is partly because only a few spare farm buildings can be profitably put to equestrian use.

“You have to be within easy reach of a large yard to benefit from the equestrian market,” says Edward Dyke from Humberts. “You wouldn’t just go ahead on the off chance of finding someone to let your redundant outbuildings to. So it’s location, location, location in the letting sector, too.”

Sometimes even location isn’t enough to guarantee high returns. Very few areas have a higher concentration of yards than Newmarket, yet “people don’t put spare buildings to equine use here because they don’t get high returns. They look at storage or offices instead,” says Emma Streeter of Bidwells’ Rural Agency.

Professionals tend to look for “all-singing, all-dancing” yards, which are even scarcer.

This shortage is often linked to low returns on yard lettings, which can lead owners to look at different investment opportunities. This is especially true in the racing market, where “returns on a yard are not brilliant because the costs are so high,” according to Streeter. “You need to factor in the right infrastructure, the upkeep and the general wear and tear.”

Limited supply ensures that competition for good rental properties is intense. “For an equestrian centre we let last year by informal tender, we received no less than 10 tenders ranging from £10,000 per annum to more than £25,000 per annum,” says Jeremy Zeid from Clarke Gammon Wellers.

As a result, prices remain very high, and Windsor Clive warns: “if the rent isn’t high enough, beware — there’s usually a catch.”

He advises that a 20-box yard, three-bedroom cottage and some land with reasonable facilities generally costs more than £20,000 per year to rent. And owners of premium properties to let — such as established stables or redundant barns in top estates — can afford to choose the right tenant.

“Generally, with these properties the covenant of the tenant is more important than the level of rent, and very often it isn’t the highest offer that will secure the deal, but who the tenant is and what business they are in,” says Windsor Clive.

Prospective tenants should look carefully at what they are renting. “You don’t want to go into a property where the fencing is damaged and repair may be onerous,” says Dyke. “Make sure you assess the state of the property with a record of condition and that you don’t have to leave it in any better condition than you find it.”

It is also crucial that the tenancy agreement spells out who is responsible for what and, if long-term, it makes provision for potential rent reviews. “Many tenants forget that the lease is for their benefit as much as the landlord,” says David Rumsey of Pelhams. “A badly-worded lease can cause considerable stress as well as a considerable amount of time and effort while the dispute is resolved.”

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This property focus was first published in Horse & Hound (10 March, ’05)