Five priorities for Burnham’s government to make new towns deliverable

The new government’s housing strategy is still taking shape. Housing Secretary Angela Rayner recently reaffirmed the ambition to deliver 1.5 million homes, while the Prime Minister has signalled a renewed focus on council housebuilding.

Less clear is how ministers intend to turn the new towns programme into a deliverable reality. New towns are unlikely to make a significant contribution to the 1.5 million homes target during this Parliament. They are long-term projects that take years to plan, finance and build. That makes the decisions taken over the next five years particularly important.

Evidence submitted to the House of Lords Built Environment Committee’s inquiry into new towns suggests the government’s immediate priority should be creating the conditions that allow the construction sector to respond with confidence. Without that, ambitions for new towns may prove difficult to deliver at the scale envisaged.

If delivered successfully, new towns could support long-term economic growth by encouraging investment in infrastructure, housing and industrial activity. However, the inquiry highlighted several structural barriers that will need to be addressed if the programme is to progress.

1. Stimulate construction demand before expecting supply to respond

The most immediate challenge for new towns delivery is weak construction demand.

Public and private housing providers currently face a difficult operating environment. Rising construction costs, inflationary pressures linked to global instability and increasing regulatory and levy costs continue to affect scheme viability.

The impact is reflected in recent data. The latest National House Building Council figures⁽¹⁾ show UK new home registrations fell by 4% year on year in the second quarter of 2026, while private sector registrations declined by 5%. Half of the UK’s regions also recorded annual falls.

Weak demand affects the wider construction supply chain. Manufacturers may reduce production capacity when workloads decline, making it more difficult to increase output quickly when demand returns. Rebecca Larkin, head of construction research at the Construction Products Association, told the Built Environment Committee that manufacturers need confidence in sustained demand before investing in additional capacity.

The committee also heard that demand-side measures, such as targeted equity loans or mortgage support distributed via something akin to the Funding for Lending Scheme, could help improve affordability and stimulate housing demand.

Alongside this, the government will need to demonstrate that the new towns programme is progressing. Acquiring land, establishing delivery vehicles and advancing early development stages would provide stronger market signals than funding announcements alone.

2. Map national materials demand to reduce future bottlenecks

The inquiry also highlighted the need for a national approach to construction materials planning.

While materials requirements are generally understood at an individual project level, there is no comprehensive national picture of future demand or supplier capacity. Given the scale of the proposed new towns programme, understanding future demand for construction products, and the resilience of domestic supply chains, could become increasingly important.

This is particularly relevant if multiple new towns or urban extensions are delivered simultaneously in the same regions. Without better visibility, shortages could contribute to delays and higher construction costs.

The committee heard that a national materials strategy could estimate future demand for key construction products, assess domestic manufacturing capacity, identify reliance on imported materials and improve understanding of the availability of lower-carbon construction products.

Such analysis could support both the new towns programme and wider infrastructure schemes by providing the government with a stronger evidence base for identifying and managing future supply chain risks.

3. Improve development viability

Even if housing demand strengthens, schemes will only proceed where they remain financially or commercially viable.

The committee heard that rising development costs continue to affect private developers, housing associations and local authorities. Alison Crofton, chief regional delivery officer at Homes England, explained that the agency is already targeting interventions to unlock schemes. Funding for enabling infrastructure, brownfield remediation and flexible finance for SME housebuilders has helped bring forward developments that might otherwise have stalled.

Building on this approach could improve the prospects for future schemes. Continued support for enabling infrastructure, wider use of brownfield remediation funding and consideration of where development costs could be reduced may improve viability.

How the £39 billion Social and Affordable Homes Programme is deployed will also influence delivery. Burnham has indicated that funding could be focused exclusively on social rent homes in future. While this is intended to improve housing affordability, the funding model will also need to support schemes that are capable of progressing.

Richard Cook, chief development officer at Clarion, told the committee that Homes England’s infrastructure funding had helped make some of the association’s affordable housing developments viable. He also noted that schemes can become more challenging in urban areas where brownfield remediation costs are incurred, and argued that grant funding from central government should continue at levels that support delivery.

4. Provide greater certainty on infrastructure funding

How infrastructure for new towns will be financed remains uncertain.

One approach discussed during the inquiry drew on the model used for Milton Keynes, where the government acquired land at agricultural value, secured planning permission, borrowed against the resulting uplift in land value and reinvested it into the infrastructure needed to support development.

Whether the government adopts that approach or another, long-term funding certainty will be important.

Baroness Taylor of Stevenage, Parliamentary Under-Secretary of State for Housing and Local Government, recently indicated that funding for new towns should come from across Whitehall departments. While this may be logical in principle, departments compete for finite resources, particularly in light of growing pressures such as defence spending.

A clearly articulated financing strategy for the new towns programme would provide greater confidence that the programme is moving beyond policy ambition towards delivery and help set departmental expectations.

Dr Alexander Budzier, fellow in management practice at Saïd Business School, University of Oxford, and Professor Juliano Denicol, professor of megaproject management at University College London, who both gave evidence to the inquiry, suggested a data-led analysis examining how feasible it would be to deliver all the proposed new towns was also necessary.

5. Address skills alongside market demand

Delivering new towns will likely require a sustained supply of skilled tradespeople, engineers, planners and technical professionals.

Skills England is already working to strengthen the skills pipeline, but evidence heard by the committee highlighted regional differences in the capacity of institutions to support national skills planning.

Jonathan Mitchell, deputy director at Skills England, identified construction skills shortages as a potential delivery risk to new towns. However, several witnesses argued that recruitment depends on confidence in future workloads. Simon Rawlinson, deputy chair of the Construction Industry Council and BCIS Tender Price Index panellist, told the committee that employers are unlikely to recruit or expand training significantly while workloads remain subdued.

Skills policy therefore cannot be separated from wider market conditions. A reliable pipeline of work gives employers greater confidence to recruit, invest in apprenticeships and adopt new technologies.

The government’s decision to expand technical education pathways linked to local industries is a positive step; stronger connections between education and employment should support workforce resilience over time. However, education reform alone is unlikely to address skills need unless businesses also have confidence in sustained future demand.

Building the whole system

The House of Lords inquiry suggests new towns should be viewed as more than a planning challenge. Delivering them depends on the wider construction ecosystem functioning effectively.

Construction demand, supply chain resilience, development viability, infrastructure funding and workforce capacity are closely connected. Progress in one area often depends on progress in the others.

The government’s immediate priority is to create the conditions that encourage investment and stronger, longer-term pipelines of work across construction. Evidence presented to the inquiry suggests that doing so would improve confidence among developers, manufacturers and employers as the programme develops. Without those foundations, the ambition for new towns may ultimately prove more difficult to realise.

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^{(1) NHBC – New home registrations fall again in Q2 as developers slow house-building activity  - here}