Reading Property Market in 2021
Coronavirus has impacted every industry differently, with an unexpected property boom throughout 2020 having propelled the UK market into the new year. We saw the average UK property price surpass £300,000 for the first time in history, while the rental market has demonstrated consistent growth. However, some regions have benefited more than others.
With many tenants and homeowners re-evaluating their priorities due to the pandemic, property demand over the past 12 months has seemingly signified a London exodus. Statistics suggest that those searching for more spacious homes in greener environments have shown more interest in the South East, especially properties along the Commuter Belt.
The desire to remain within a commutable distance to the capital has made the South East – including Reading, Bracknell and Slough – more appealing. The £11,363 increase in average property price in Reading alone can be attributed to this increased demand, with sales reaching almost 2,000 in the last 12 months. While the town’s average property price currently sits at £425,146 – significantly exceeding the UK average of £305,387 – the momentum from the London exodus has the potential to push prices across the South East an additional 5% in 2021.
Not only have we seen homeowners and prospective buyers swap London living for greener prospects, but this trend has also shifted the short-term priorities of tenants. Reading’s current rental yield already surpasses the UK average by over 1%, but society’s new approach to flexible working could drive this further by reducing the necessity of central London living.
Reading Past Performance
Even before Coronavirus boosted the UK property market, Reading was in an upward trajectory. In 2011, the average property price stood at just £290,000, before reaching £350,000 in 2015. Averaging £15,000 of annual growth, the past performance of Reading’s property market only reinforces the popularity of the South East.
As well as having a proven track record of consistent price increases, Reading also offers a competitive rental yield to match. Not only is the town currently sitting on 4.6% rental yield, but 2020 saw the rental costs across the South East rise by 10.6% – the first time the region has seen double-digit growth. While London endured a double dip in its property market, 62% of landlords in the South of England were able to achieve higher rents on their properties.
The town’s potential as a business hub has long been a contributing factor to Reading’s growth, with continuous investment into Grade A office spaces over the past 10 years. Spanning both business parks and the town’s centre, Reading now has the largest stock of high-quality offices in the region. By attracting both businesses and employees, this demand has had subsequent benefits for the residential property market.
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Reading Supply & Demand
With Reading, Bracknell and Slough forming a trio of expanding business hotspots across the Thames Valley, housing numerous global brands, both commercial and residential demand is expected to continue growing in the years to come. Forecasting a 6.4% population increase by 2026, the South East will be home to almost 10 million citizens.
As the population increases, so will the demands of tenants and homeowners. With a growing focus on employment opportunities, amenities and premium living, towns across Berkshire are undergoing extensive regeneration schemes to meet such priorities. The Reading Vision is an ambitious scheme set to be completed by 2050, which will aim to position the town as a cornerstone of the wider region.
By emphasising the potential of the area, it’s likely that more and more businesses will be drawn to both Reading and nearby Bracknell, which in turn will drive inward investment. In addition to offering existing residents more opportunities, the quality of the businesses in these areas will no doubt attract graduates and young professionals, who in turn are more likely to choose commuter towns over living in the capital.
The University of Reading attracts hundreds of thousands of students to the South East, and with a graduate retention rate of 20% (19,000 young professionals), the town’s revitalisation will only increase this further. Half of Reading’s existing population are educated to at least degree level – a solid foundation to build upon.
Reading Economic Forecast
Offering over 40,000 jobs in the creative and tech industries alone, Reading contributes a notable amount to the local economy. However, when compared to neighbouring towns, such as Bracknell, Reading’s business hub has room for improvement. While the average salary in Reading is £42.8k, Bracknell is reaching almost £50k.
Nonetheless, the South East continues to outpace the average salary in the UK, which currently stands at £38.6k. The plethora of global companies that are housed across the region, combined with the affordable living rates, are inevitably contributing factors.
With Reading accommodating leading finance giants, such as PwC and EY, the profile of the town has been rising with these increased networks. As a result, Reading has seen over 3.7 million sq. ft of large office deals across the town in the past five years alone, delivering over 20,000 jobs to the local community.
During the whirlwind of the global pandemic, Reading’s commercial property market also remained relatively unharmed. While Coronavirus contributed to uncertainty around the future of the office, this failed to deter companies from moving their business to the emerging town. With 14 companies signing contracts for office space in Reading over the past 12 months, the town’s future prospects are promising.
Key Projects Driving Growth in Slough
Multiple regeneration schemes across the South East are driving the necessity of redevelopment projects within Reading. With Bracknell in the midst of its biggest transformation to date, and the Elizabeth Line nearing completion in Slough, the revitalisation of Reading’s town centre is essential to continue enticing international tourists and residents from neighbouring towns.
The Vision for Reading is an ongoing regeneration scheme, which is set to run for the next 29 years. Having recognised the town’s potential, this project aims to engage with residents from across the town, as well as supporting Reading’s economic growth and evolution as a smart, sustainable city.
The redevelopment of Station Hill will play an integral part in the town’s regeneration, delivering residents an ambitious mixed-use complex. With an estimated completion date of 2022, Station Hill will transform Reading by delivering sustainable homes, increased living space and numerous leisure facilities.
To maximise the appeal of the town, the focus of these regeneration projects will predominantly be placed on building hotels, communal spaces and retail hubs. For example, the redevelopment of Queen Victoria Square will include a terrace with outdoor seating, access to a new apart-hotel and linkage to the town centre.
The regeneration of Reading is relatively long overdue, and has the potential to catalyse further redevelopment schemes throughout the town. The Station Hill project alone could onset a project of over 1,000 new homes and 600,000 sq. ft of office space, which would deliver an estimated 8,000 jobs.
The future growth of Reading, combined with that of Slough and Bracknell, positions the South East as a unique investment opportunity. With the anticipated surge in employment opportunities and subsequently, the surge in the region’s population, the demand for property will continue to grow, pushing both property and rental prices.