According to Haslams lettings agency’s latest House Price Index, a new hotspot has emerged for private rental sector investors.

It claims Reading rental yields reached 5.55 per cent in December 2023 compared with prime London at 4.46 per cent.

Rental values in Reading increased by 29 per cent since Q2 2021 – and yet the agency says a premium property in the town costs up to 30 per cent less than the average London home.

It says projections from developer St Edward indicate a 13 per cent annual increase in UK rental prices. 

And it says Reading is home to a secure and growing rental market with 32 per cent of households renting privately, higher than the South East average of 19 per cent.

The town is also positioned to outshine London’s sales market, anticipating a three to five per cent price growth over the next five years.

In addition, Fdi Intelligence reported that Reading was the best European City for Business in 2023, and business consultancy EY predicts the town will be the fastest growing location in the country between 2024 and 2026.

Mike Shearn, Group Investment & Development Director at Haslams comments: “Reading’s exceptional rental rate growth is the consequence of its growing population and a lack of good quality rental properties. Whilst we are unlikely to see such growth in the future we do expect rental yields to remain high for some time to come.

“Sensible price-setting by landlords for rental properties will be increasingly important in 2024. 

“Whilst underlying demand will remain strong, many tenants’ budgets are now at peak stretching-point. In terms of capital values, we believe that the improved consumer sentiment, buoyed by lower inflation and mortgage rates, will result in heathy growth from 2025. This may further improve yields for investors”.