The John Lewis Partnership’s plans to build a new rental home scheme in Reading are facing a potential setback. Advisers for the company have warned local councillors that any significant delays in the planning process or additional demands for funding local services could jeopardize the project’s financial viability, potentially leading to a reduction in the number of affordable flats offered.

The Development in Reading

  • The Plan: John Lewis intends to transform its former distribution warehouse into a “build-to-rent” scheme, offering a mix of rental flats. The retailer has committed to making 10% of the proposed 170 flats affordable and available at lower rents.
  • Initial Concerns: The project, which was initially planned for 215 homes, was already scaled back to 170 flats following discussions with local stakeholders regarding the pressure on services.
  • The Warning: A letter to Reading councillors from the company’s consultants, DS2, revealed that the scheme already “costs more to build than it is worth on paper.” The letter warned that further requests for funding for local services, such as schools or healthcare, could lead to a “reconsideration of the affordable housing final commitment.” The commitment to 10% affordable housing is conditional on the planning application being approved “within a reasonable timeframe.”

A Wider Trend

This situation in Reading is not unique. John Lewis is pursuing similar “build-to-rent” schemes in West Ealing and Bromley, both of which have faced their own delays and local opposition. This highlights the growing challenges developers face in a market where they are expected to deliver a significant number of affordable homes while also navigating lengthy planning processes and rising construction costs. The average wait time for developers to secure a Section 106 agreement, which governs contributions towards local infrastructure and affordable housing, is now 515 days across England.

The John Lewis Partnership spokesperson has reiterated the company’s commitment to providing “as much affordable housing for Reading as is viable,” and says they are “working constructively with the Council.” The outcome of this project will likely be watched closely by the wider development industry as a case study for the viability of ambitious residential schemes in the current economic climate.