Desire for more space continues to drive Reading rental market

The desire for homes with quality living and leisure space continues to fuel the Reading rental market, Savills says.

According to the property consultant, the town and surrounding area has seen a spike in demand for higher end homes as people reassess their priorities in light of recent experiences.

Gordon Hood, who leads the lettings team at Savills Reading, said there continues to be strong demand for larger properties – but limited supply.

“Large parts of the market continue to be driven by people looking to make real lifestyle changes as a result of Covid-19 and the experience of lockdown,” he said. “It’s too early to know if this shift in mindset and behaviour is permanent, but we expect to see it carry over into early 2021 at least.”

“Competition for the best properties, particularly family homes on the fringes of Reading town centre and surrounding areas, has fuelled price rises. People now anticipating a mix of home and office working are looking further afield, while some are adopting a ‘try before you buy’ approach before a permanent move.

“However, tenant demand is only part of the story. The strong appetite for properties means that stock levels have fallen. As a result, whilst tenants are still mindful of value for money and best-in-class quality, the lack of available homes has resulted in multiple bids for some properties.

“This in part has contributed to rent increases, with 25 per cent of prime properties letting above the asking price in September.”

The changed market conditions has encouraged Savills to revise its five-year prime rental forecasts for the commuter belt – with prices expected to rise by 11.5 per cent by 2024. In London the rise is expected to be 7.6 per cent.

Prime rental growth	Central London	North West London	South West London	West London	North & East London	Commuter Belt
Quarterly	-2.3%	-1.7%	0.7%	-0.8%	-2.6%	1.2%
Annual	-4.7%	-2.6%	1.3%	0.4%	-4.6%	2.7%
5-year	-21.4%	-8.3%	-5.0%	-4.5%	-1.9%	-1.8%

Savills prime lettings index Q3, 2020.

Rental rise forecast	2020	2021	2022	2023	2024	Total 2020-2024
London	-3.0	+1.0	+4.5	+2.0	+3.0	7.6%
Country	+3.5	+2.0	+1.5	+2.0	+2.0	11.5%