Promising signs on funding and new towns

Posted: February 19, 2025 | Author: julesbirch | Filed under: Affordable housing, New towns |Leave a comment

Originally written as a column for Inside Housing.

After a relentless week of grim international news, it’s good to have something to celebrate on the domestic and housing front. 

Until the spending review in the Spring, any assessment of the government’s overall approach to housing will have to be provisional but this week brought some hopeful signs. 

First up was the announcement of an extra £300 million for the Affordable Homes Programme (AHP), plus for more temporary housing, then confirmation that this is in addition to the £500 million announced in the Budget in October.

At the time that seemed a little underwhelming given advance speculation that an extra £1 billion might be available but it now seems that some of that was held back. 

True, the additional 7,800 affordable homes promised will only make up for a small part of the 50,000 to 70,000-home shortfall against what the 2021-26 AHP was originally expected to deliver, but that still represents a significant short-term boost for this year and lays down a marker for the future in the spending review. 

It also recalls the last couple of years of the last Labour government, when regular announcements of extra investment added up to something more significant over time.

Next up, and more for the long term, is the announcement that more than 100 sites across England have been put forward as candidates for the next generation of new towns. 

This too has to be put in perspective, since this new generation seems unlikely to resemble the new towns developed from the 1940s to the 1970s either in scale or potential for social housing. 

We have also been here before with seemingly bold announcements on eco towns, garden villages and the like that have led precisely nowhere, though this one is backed up by some solid announcements on the New Homes Accelerator and Building Safety Regulator.

These new towns could be urban extensions as well as free-standing settlements and so should not take as long to get off the ground.

They could draw on lessons from successful new districts of existing towns, like Poundbury in Dorset and Nansledan in Cornwall (visited by Keir Starmer and Angela Rayner with the King this week). However, each of the new ‘new towns’ will have the potential to deliver 10,000 new homes, making them twice as big.

All this was meant to be formally announced by the prime minister on a visit to a housebuilding site in Milton Keynes on Thursday but he had to leave without taking questions after a noisy protest by farmers. 

Decades of unfulfilled promises and hi-viz photo opportunities from politicians from both main parties suggest a need for caution about the prospects and you sense that progress will depend on a period of political stability such as we have not seen for a decade.

Even then a dozen new towns with 10,000 homes each would mean 120,000 new homes in total over a decade or more. However, it’s easily forgotten that the post-war new towns did not contribute a huge share of housing supply either.  

As a demonstration of intent there were some promising signs from housing minister Matthew Pennycook in an interview on the Today programme on Thursday.

Though he insisted that the new towns programme will contribute to the 1.5 million homes target for this parliament, the point surely is to sustain that over a longer period.

And on funding he sounded confident when he said that ‘the spending review will outline how the government will stand behind that’. 

Another hopeful sign came in a column in The Times from Simon Jenkins attacking plans for new homes between Oxford and Cambridge.

When it comes to housing, it’s a fair rule of thumb that you should do the opposite of what ‘Simon says’: go back 70 years and there were protests about the creation of ‘Silkingrad’ (named after the planning minister) in what went on to become Stevenage so we should be just as happy with Starmerville.

An interim report from the New Towns Taskforce was published this week, with the final report and shortlist of sites due to be delivered to ministers in the summer. 

That will also have to include answers to some of the fundamental questions posed in the interim report about long-term funding, land acquisition and land value capture that will be required if new towns are to be more than just window-dressing for private development led by volume housebuilders. 

With those answers, perhaps we can really begin to make some progress on boosting housing supply over the long term. Without them, another new towns announcement will be along soon. 

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