'Astounding' rate of demand for Reading's latest BTR scheme

The first phase in the latest Build-to-Rent (BTR) scheme to hit the Reading market is almost 60 per cent let, just three months after launch.

Haslams, which is marketing the Domain scheme in Weldale Street alongside LIV, has seen lettings of the flats at around twice the rate that would normally have been expected.

The 252-unit first phase of the 429-apartment scheme by Ropemaker went on the market at the beginning of June.

Haslams chief operating officer Mike Shearn said: “On a BTR scheme, an owner would typically aim to pre-let 20 per cent of the units before taking practical completion and would probably launch two to three months from taking ownership.

“Domain launched at the beginning of June and by the time of the first completions in mid-July over 30 per cent had pre-let.

“Now, just three months on, almost 60 per cent have let. It’s astounding, and reflective of the product and the market at this time.”

The popularity of BTR schemes, he said, has been driven by Government initiatives that have driven huge inward investment by large funds while at the same time squeezing private Private Rented Sector (PRS) landlords.

He said: “Rental values are increasing because there’s far more demand than supply. Unfortunately, it’s the perfect storm for tenants but you could see it coming for years.

“Successive Governments have introduced regulations and stipulations so some PRS landlords have decided to leave the market and valuable stock has been lost. The consequence being less choice and higher rents for tenants.”

Mr Shearn said in January 2022, a typical PRS town centre apartment would have let for around £25 per sq ft. At the same time it is believed by sources in the residential market that Thames Quarter, Reading’s first BTR scheme, was achieving around £30 per sq ft. This, he said, illustrates the additional value tenants attribute to BTR.

Haslams’ own Rental Price Index indicates that, in June, rents for town centre apartments in Reading had risen a further 2.33 per cent over the previous quarter, and 13.9 per cent year on year.

Mr Shearn sees two distinct types of BTR emerging; pure BTR – a premium offer based on creating communities – and what he refers to as Institutional PRS, similar to normal PRS but with higher service levels.

Pure BTR (including Thames Quarter and Domain) is for those fully buying into the subscription lifestyle wanting ready-made communities with on-site facilities like gyms, cinemas, roof terraces along with on-site events like yoga classes, book clubs, wine tasting, and socials like BBQ evenings.

Mr Shearn said institutional PRS is renting an apartment from a corporate, rather than private, owner to benefit from higher service levels.

He went on: “BTR is very much in its infancy. It’s definitively not all things to all people. At the moment it is very focused on 22-35 year olds because it’s a large target that understands what’s on offer and they are happy to pay for it.

“However BTR will evolve and many other market segments will be serviced. For example, I believe that one of the most obvious markets is retirement.

“As people get older they typically want a smaller home and a simpler and easier life. However, they don’t want to compromise on their quality of life but rather enhance it and enjoy it.

“BTR could deliver this in spades plus it could help release equity if required. People just need to get their heads around BTR. Not every market is there yet but it’s only a matter of time.”

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