Research by Savills suggests Reading will continue to be a key location for growth but will be constrained by a lack of development land.
Its Reading: Positioned for Growth report, considers the strength of, and opportunities within the local market, and whether the town is equipped to realise its potential in the South East market.
A demographic shift towards increased numbers of younger residents will support the pipeline of thousands more rental properties in the town centre but the report also shows a pent-up demand for family housing threatens to inhibit the town’s longer term growth.
Emily Williams, a director in Savills UK residential research team, said: “Much of Reading’s economic strength is based on its graduate employment credentials. The University of Reading boasts an undergraduate population of 12,500.
“The town also successfully attracts graduates who have studied elsewhere, 30 per cent of whom are originally from Reading and have moved back following their studies, with its thriving economy, vibrant regeneration and excellent connectivity to the capital being pull-factors.
“Retaining a strong pool of graduates will be key to Reading’s future, and the residential development pipeline looks able to facilitate this.
“However, our research indicates that the town is becoming a less attractive location for families, which could have an adverse impact on its longer-term prospects. Planning for a greater variety of homes in and around Reading across a range of price points and tenures, is key to ensuring that students and young professionals moving into the area now are catered for in the future.”
The report shows that while Reading has performed relatively well in numbers of new homes, the borough’s adopted target is more than 200 homes short of the standard method for calculating housing need.
In recent years, need that could not be met in Reading has gone to neighbouring boroughs such as Wokingham. Housing targets across the county only make up 78 per cent of the need.
Ed Keeling, head of development for Savills Reading, said: “Failing to identify enough land to accommodate the homes the area needs poses a significant risk to Reading’s future economic growth.
“Without sufficient housing at the right price points the town risks becoming less attractive to both employees and commercial occupiers.
“The research highlights that, while Reading is doing a good job of attracting younger in-movers, it is failing to provide for families, and as such we are expecting a drop of 4.8 per cent in the population aged between 25 and 50 over the next decade. It is crucial that this is addressed.”
Savills planning director Julia Mountford said: “A partial review of Reading’s Local Plan, which is currently underway, provides an opportunity to tackle these issues.
“In particular, it highlights the need for more larger family homes, which currently accounts for only 18 per cent of housebuilding in the town. The process will look at housing densities, and review almost all of the existing allocations but has not gone as far as re-examining the tall buildings policy.”
Downsizers are another group being drawn into Reading, with the population of over 65s expected to grow 3.2 per cent in the next decade. Downsizers represent 31 per cent of new home buyers in Reading according to Savills data, while the equivalent proportion for Berkshire is 14 per cent.
Alexa Peters, head of residential development sales for Savills in Reading, said: “Apartment schemes have dominated the local market in Reading, accounting for 89 per cent of sales since 2020. Consequently, first time buyers, investors and downsizers represent the vast majority of the buyer pool.
‘While these groups, many of which are moving from London, are attracted by the relative affordability of a one or two-bedroom apartment compared to the capital, families looking for more space are grappling with rising prices, with the latest average house price to income ratio at a high of 9.41.”
Savills reports that demand for commercial space faces similar pressures. The One Station Hill building is set to set a record high in rents.
Steve Lang, commercial research director, said: “Looking forward, Reading has a real opportunity to capitalise on the continued growth of the science sector, particularly in terms of expanding its attraction to those occupiers requiring R&D facilities, following the chronic lack of space in the London-Oxford-Cambridge ‘golden triangle’.
“Its presence within the film and television sector is also continuing to grow, highlighted by the cluster of new film studios opening in or close to the town. The partnership with the University of Reading and Wokingham Borough Council will boost employment and engagement opportunities, which will strengthen the future talent pool for the sector in the area.”
Phil Brown, head of Savills Reading, said: “Our research reflects what the teams in the Savills Reading office are experiencing on the ground.
“Whilst accommodating development will inevitably pose a number of challenges, the review of the Local Plan just commenced is timely, allowing policies and allocations to be updated so that future development needs can be met.”
© Thames Tap (powered by ukpropertyforums.com).
Sign up to receive our weekly free journal, The Forum here.