The Colesbourne estate lies in the beautiful setting of the Churn valley, halfway between Cirencester and Cheltenham, in the heart of the Cotswolds. John Elwes, son of the celebrated miser, purchased the estate of 1600 acres in 1789 and over the next few years more land was added to make a total of 6000 acres. The original house, situated near the church, comprised a very elegant Queen Anne front built onto an ancient manor house in 1703 by the Sheppard family, clothiers of Minchinhampton. Their other estate was Gatcombe, now the home of the Princess Royal. In 1850 J.H. Elwes decided that the old house was too small for a family of twelve children, demolished it, and built a grand Victorian mansion on a new site nearby. This house was requisitioned in the last war and then lay, half empty and devoid of furniture until inherited by the present Henry Elwes in 1956. With no prospect of re-furnishing the huge house Henry pulled it down in 1958 and built a smaller one on the same site, incorporating one room from the old mansion. The estate now comprises 2500 acres including four farms, 900 acres of forestry and most of the village property.
The lake was created in 1922 in a deep wooded valley near the house to provide hydro-electric power for the big mansion. The wonderful blue colour is believed to be caused by the colloidal clay in the water.