Phil Brown, Planning Director and Head of Office, Savills Reading examines the potential for house building in Berkshire’s major town.
Reading has experienced strong price growth in its residential market over the last decade, outperforming both the South East and wider parts of England and Wales, yet it still offers relative value against other similar markets in the region. The average sale price in the 12 months to June 2016 is £305,000, according to the Land Registry. This represents an increase of more than 50% since June 2011. However it still stands more than 12% below the South East average of £343,000.
This notable rate of growth is due to the town’s strong employment market and booming local economy. Oxford Economics forecast a 3% rise in total employment in Reading to 2020, which equates to 2,900 new jobs. This is reflected in the private rented sector, which accounts for 26% of the market compared to just 16% in the rest of the South East.
“Confidence in the development land market across the Thames Valley is undoubtedly strong even in the aftermath of the EU referendum.”
Development opportunity
For this reason, the town is entering a phase in the development cycle where the delivery of new housing will become a significant focus for Reading Borough Council. With housing supply 30% below identified need, it is no surprise that demand remains high. A number of housing schemes are currently coming forward, including 630 units at Royal Elm Park and L&Q’s scheme for circa 800 units at the Toys R Us and Homebase site in the centre of Reading. Despite this, further sites will need to be found to meet requirements.
Confidence in the development land market across the Thames Valley is undoubtedly strong even in the aftermath of the EU referendum. We are currently entering into a ‘litmus test’ period where a phase of significantly sized parcels across the region are being offered to the housebuilding market for the first time in months.
