Townsend, 24, has come up through the ranks at Tottenham, having initially joined the club at the age of eight, but he has struggled to make an impact under Mauricio Pochettino.
Whilst homegrown players like Ryan Mason and Harry Kane have thrived with Pochettino at the helm, Townsend has become an outcast at White Hart Lane, putting his place in England's Euro 2016 squad at risk.
Townsend has played just 64 minutes of Premier League action this season, with no starts to his name - and no appearances at all since a row with fitness coach Nathan Gardiner in November.
Now playing for the Tottenham Under-21 side, it's clear that Townsend has no future at Spurs, and a departure this month seems almost inevitable.
The Daily Mail report that the likes of Aston Villa, Newcastle United, Southampton and Sunderland are all hoping to sign Townsend this month, but a new team has entered the race for his signature; Everton.
The Toffees drew 1-1 with Spurs on Sunday, and have seen some inconsistent wing play from the likes of Kevin Mirallas and Arouna Kone, whilst Steven Pienaar and Aiden McGeady have struggled with fitness and form respectively.
Manager Roberto Martinez may now pursue Townsend, with the report stating that Everton are monitoring Townsend's situation ahead of a possible deal - which may be reminiscent of Aaron Lennon.
Another pacey England international winger who struggled for football under Pochettino, Lennon left Spurs for Everton on loan last January before making the deal permanent in the summer, and if he can strike a similar deal with Townsend this year, we may well see the 24-year-old wide man turning out at Goodison Park.