Despite not realising its ambition to achieve city status, Reading is a location that is poised for growth. Driven by its strength in the professional, scientific, technical, information and communication sectors, the EY Regional Economic forecast predicts it to be the fastest growing location in the country between 2024 and 2026.

A young professional-centred population

Its population is expected to reach over 165,000 by 2030, with the 15-24 age band projected to become the largest group by 2033, accounting for more than 17 per cent of the population. Much of this growth is expected to be driven by those in their early twenties, reflecting the town’s strength in higher education and as a destination for graduate employment.

Residential development in the town centre plays well to this important demographic, with a strong bias toward purpose built stock, and a focus on the rental market. 1,150 homes within the residential pipeline will be delivered as purpose built rental units, 800 of which are already under construction, including a significant scheme at Station Hill.

While this represents a considerable addition to Reading’s current rental stock, Savills analysis suggests there is capacity to absorb this level of delivery. 48 per cent of movers to the town in 2020-21 entered the private rental sector and over 53 per cent of movers aged under 30 were renters.

‘Much of Reading’s economic strength is based on its graduate employment credentials,’ comments Emily Williams, a director in Savills UK residential research team; ‘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.’

Building for the future

The Savills research shows that while Reading has performed relatively well in terms of its supply of new homes, building more than the Local Plan annual target for 689 in three of the last five years, the adopted target is over 200 homes short of the standard method for calculating housing need. Over the last five years, need that could not be met in Reading has been delivered across the wider area, largely in Wokingham. The analysis shows that it is unlikely Reading will be able to rely on supply elsewhere in Berkshire in the future, and that across the county, the housing targets being planned for are equivalent to only 78 per cent of actual need.

‘Failing to identify enough land to accommodate the homes the area needs poses a significant risk to Reading’s future economic growth, said Ed Keeling, head of development for Savills in Reading; ‘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.’

‘A partial review of Reading’s Local Plan, which is currently underway, provides an opportunity to tackle these issues,’ commented planning director, Julia Mountford; ‘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 by 3.2 per cent in the next decade. Downsizers represent a considerable 31 per cent of new build home buyers in Reading, according to Savills data, more than double the percentage (14 per cent) across Berkshire as a whole.

Alexa Peters, head of residential development sales for Savills in Reading, comments: ‘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.’

Capitalising on commercial prospects

Similar to the residential market, Savills notes that the office market in Reading has seen a supply / demand imbalance for high quality space, which has already started to have upward pressure on rents. Station Hill, located in the centre of Reading, has been speculatively developed by Lincoln Property Company and MGT Investment Management and is expected to set a new record high for the South East office market, which underlines the flight to quality drive from occupiers.

Steve Lang, commercial research director, commented: ‘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.’

‘Our research reflects what the teams in the Savills Reading office are experiencing on the ground.’ concluded Phil Brown, head of Savills Reading: ‘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.’

Read and/or download the research in full here.