Residential market sees soaring rents and lack of supply

Residential rents have increased by around 10-15 per cent in the last year, creating opportunities for investors, delegates heard at a Thames Tap round table event.

Thames Tap partners joined us at The Tin (formerly The Biscuit Tin) in Station Hill on Tuesday, July 12, to see the unveiling of REDA, learn more about the Station Hill development and take part in a discussion on the local property market.

Phil Brown, head of Savills Reading, said in the local rental market Savills has seen applicant registrations up by 80 per cent against the same period in 2021.

He went on: “There’s lots of interest but, across markets, availability of stock is down by about a third. So pricing is strong but there’s a great opportunity for most people seeking (to buy) rental property in the market.”

The 322-flat Build-to-Rent Thames Quarter scheme, marketed by Savills had, he believes, filled quicker than expected.

“That’s good evidence of demand in the market and it seems to be strong,” he added.

Steve Woodford, managing director of Haslams, said his firm has let 80 flats within six weeks at Ropemaker’s Domain development, a Build-to-Rent (BTR) scheme in Weldale Street. Haslams had also recorded a record month for all lettings last month with 90 deals.

He said: “Stock is the problem. With lettings there’s not a lot of new stuff coming through. What you do get is a lot of young people who might want to give their notice so you get some stock coming back to the market. Rents, I would say, have probably gone up anything between 10 and 15 per cent compared to last year.”

He said the market has shifted heavily from flats for sale to flats to rent.

He added: “We probably used to sell 3-500 apartments a year in Reading on average over the last 10 years. Brand new, right now there isn’t a single flat for sale in Reading so we’ve had to change our model completely.”

He argued that Government schemes like Help to Buy and the Stamp Duty holidays had driven prices up, the opposite of the effect the Government had intended.

Hugo Haig, director of Lochailort, which built Thames Quarter, said levels of amenities differentiate BTR schemes, and Thames Quarter offers many. He said BTR helps make regeneration possible and will evolve further.

“It’s quite a new emerging sector, obviously it’s going to be a big sector, but things like Station Hill would not be happening without a third party funding source.

“It’s incredibly expensive to build these buildings. It can only be done on a forward-fund basis. It’s going to rejuvenate the Reading town centre. It will rejuvenate lots of town centres.”

Station Hill developer Lincoln Properties, he argued, had come along, not as a commercial developer, but a residential one.

Image shows some of those taking part in the debate. L-r Rob Allaway (managing director of DevComms), David Jones (managing director of Evans Jones), Charles Bushe (director DevComms), Nigel Horton-Baker (executive director of REDA), Matthew Battle (managing director of UK Property Forums), Jo Jackson, director of SEGRO, Becky Holland (managing director BH&P), Hugo Haig director of Lochailort and Phil Brown (head of Savills Reading).

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