When Housing Politics Lacks Bravery and Ambition – Everything Wrong with Labour’s New Town & Housing Acceleration Plan

In our previous articles, When Britain Stopped Building: Our Greatest Economic Blunder and Solving the Housing Crisis – What’s in the Way?, we examined the UK’s historic ability to build homes at scale, how that system was dismantled, and the challenges, both new and old, now standing in the nation’s way. Housing is far from an unsung issue, however, and the need to resolve it, and the history behind it, is not something our current political class is unaware of. They know it’s a problem. They know it needs fixing. But does anyone have a plan to do it?

Britain is in a similar position to 1946, and we were able to overcome that crisis largely due to the Bevan New Towns Act 1946 and its successors. Our current government hopes that invoking the New Towns Act, at least in name, will instil public confidence equal to that enjoyed by its predecessors. But simply calling something a “New Town Plan” does not mean it will achieve the same ends, particularly, when the modern party fails to implement any of the tools that made thew New Towns of the past feasible.

The New Towns Acts were more than slogans. They were a well-thought-out, long-term systems of housebuilding machinery that worked in tandem with planning, social infrastructure and financial rules to ensure housing was cheap to build, own, and rent. Labour’s New Town Plan doesn’t even scratch the surface of that old system. The post-war model was deliverable because it had the institutions, the land powers, a bespoke planning route for housing, and the delivery capacity to actually execute. Today, we have decades of missed targets and a single burdensome local planning system through which almost all development is funnelled.

It is working people who pay the price of poor housing policy. Whether that be through the extortionate cost of their own homes, the tax bill of subsidising others, or the social cost of spiralling homelessness, it is working people whose bank accounts bear the pinch. And the tighter working people’s budgets become, the slower our economy grows and, long-term, the worse life gets for working people, and eventually, everyone else. Poor housing policy is intrinsically tied to weak economic growth, and working people cannot afford for growth to remain low any longer. This government, or the next, must solve the housing crisis, or Britain is headed for a bleak future.

This article reviews Labour’s New Town Plan and considers the challenges it must overcome, its merits, and its shortcomings. Through in-depth analysis, we will assess the likelihood of positive impact and set out where Labour, or any future government, needs to go further.

The Challenge (And the Ambition)

Before we can critique Labour’s New Town Plan, we must first appreciate the scale of the challenge the plan is intended to overcome. The clearest indicator of that challenge is the gap between housing production and demand, coupled with the existing backlog.

Labour has committed to delivering 1.5 million homes during the current parliamentary term: equivalent to 300,000 per year. In its first year, however, it delivered 208,600 homes, falling 91,400 short of its own target, and representing a decline of roughly 20,000 compared with the most recent previous year. This leaves 1,219,400 homes outstanding. To meet its stated goal, Labour would now need to deliver 322,850 homes per year over the next four years. The immediate question is not only whether this is achievable, but whether 1.5 million homes was ever ambitious enough.

Some experts estimate the current housing backlog at between 4 and 6.5 million homes.

To test this, we first compared housing delivery during the 1950s and 1960s, when an average of 325,000 homes per year were built, with delivery from 1980 onwards. Had post-1980 construction merely continued at the rate achieved in the 50s and 60s, the UK would have built approximately 15 million homes since 1980. In reality, fewer than 8 million were delivered. On this basis alone, we can be confident that housing production over the last 45 years is around 7 million homes lower than it could reasonably have been.

We then compared this against population growth. Since 1980, the UK population has grown by an average of 289,807 people per year, totalling 13,041,337 people. Using a conservative assumption of one home per three people, broadly consistent with occupancy levels in 1960, this implies a need for 4,347,112 additional homes from 1980 to present day. At first glance, this might suggest that the roughly 8 million homes built since 1980 were not just sufficient but would also amount to an abundance. However, that conclusion does not survive closer scrutiny.

Cultural change and longer life expectancy have dramatically altered household composition. Single-person households have risen from 3.4 million in 1980 to 8.5 million today. In addition, around 1.1 million homes are now used as second homes, approximately 350,000 are used as bed-and-breakfast or short-term holiday lets, and a further portion of stock has been lost to dilapidation. Accounting for these factors, we estimate that maintaining the 1980 status quo would have required between 11 and 12 million homes, implying an underbuild of roughly 4 million.

While higher estimates of 7 million may be pessimistic, 4 million appears to be a realistic and defensible representation of the current shortfall.

Crucially, this backlog is not static; it continues to grow.

Experts take different approaches to estimating the annual level of supply required to stabilise costs. Some argue that housing stock must grow by 1% per year simply to hold prices steady, meaning by roughly 285,000 homes. Others suggest a range between 240,000 and 340,000.

We chose to calculate need using net population growth. Taking the UK birth rates from 2007 (690,013) mins today’s death rate (568,000), and adding the average net migration of the last five years (392,400), we arrive at approximately 520,000 people per year requiring housing at current rates. Using a more realistic modern occupancy ratio of one home per 2.4 people, this implies a need for 234,000 additional homes per year just to maintain the current crisis level. We then compounded to reflect population growth from 2007 onwards, this equates to roughly a 1% annual increase in demand. On this basis, Labour would need to deliver approximately 1,193,635 homes over its five-year term, or 240,000 homes per year, simply to prevent the situation from worsening.

If Labour were to reach its target of 300,000 homes per year, it would be capable of broadly maintaining the current state of affairs and only marginally reducing the backlog, and that is before accounting for any further increases in net population growth. Even under these generous assumptions, it would take sixty years in total for this level of production to meaningfully clear the backlog. If Labour continues to miss its own targets as it did last year, the backlog will instead worsen by roughly a quarter million homes before the next parliament.

Having reviewed these figures, we feel confident in concluding that 1.5 million homes is nowhere near ambitious enough to resolve the current housing crisis. To solve the crisis within a single working lifetime, and to return to the supply levels of the 1960s that were so integral to strong economic growth, Britain would need to produce around 81,600 more homes per year than annual demand, equating to roughly 321,000 homes per year. Even then, several generations would still grow old in an economy burdened by high housing costs.

To resolve the crisis within a timeframe that actually benefits the working people of today, housing production would need to be closer to double the annual demand increase, approximately 500,000 homes per year. That level of output would return Britain to 1960s-style supply conditions by around 2040.

The current New Town and Housing Acceleration Plan appears highly unlikely to be capable of delivering anything close to this.

Let’s look at why.

Speed

The first failing of the current government occurred before it even took office. A parliamentary term is short. Five years is all a government is guaranteed in which to prove its worth. That gives Starmer’s New Towns Taskforce & the Ministry for Housing, Communities and Local Government five years to review the problem, design a system, execute it, and demonstrate results before potentially handing the reins to another government. If the Plan is not producing homes at scale by August 2029, it may well be dismantled before it has had the chance to properly get going.

They very much needed to get ahead of the game and be ready to deliver from day one. Labour had enough time in opposition to prepare and ensure they could do so and maximise their five years in power, but the evidence suggests they did not utilise that opportunity at all. One of those five years has already passed. The end of the second is fast approaching. Housing production has dipped, and the backlog has grown.

The New Towns Taskforce, led by Sir Michael Lyons, was established in July 2024 and has since produced four policy statements and zero homes. The Taskforce is currently occupied with identifying potential sites for new towns and clarifying the hurdles involved. In the late 1940s, much of this work had already been completed before the election of the Attlee administration, most notably through the 1942 Uthwatt Report, which identified the barriers preventing Britain from building at scale. That report allowed the incoming government to take immediate action.

Comparable work has already been done in the modern era, beginning with the 2004 Barker Review, followed by the 2018 Letwin Review, the 2018 Raynsford Review, and, somewhat ironically, the 2014 Lyons Housing Review. While these did not identify specific new town locations, they collectively diagnosed the structural barriers to building at scale, in much the same way the Uthwatt Report once did. Much of what the New Towns Taskforce is doing today is therefore re-treading ground already well covered.

The Attlee government took office on 26 July 1945. The New Towns Act 1946 received Royal Assent on 1 August 1946, and the Town and Country Planning Act 1947 followed on 6 August 1947. The first new town, Stevenage, was designated by 11 November 1946, with its development corporation established before the end of that year. Master-planning began in early 1947, infrastructure works were underway before the year’s end, and the first residents moved in by 1951. A further thirteen new towns were designated before the end of the Attlee administration, including Hemel Hempstead, designated in early 1947, with houses under construction by 1949 and residents moving in by February 1950. By this point in the Attlee government’s term, not only had the New Towns Act received Royal Assent, but delivery was already visibly underway. The current government, by contrast, has yet to designate a single site in the same timeframe and has none of the complimentary statutory instruments in place it will require to deliver.

In short, the 1946 government was able to act quickly because it already had the information required to legislate and deliver from the outset. The government today also has that information but has instead fallen into the modern trap of dither, dally and delay. Given a realistic lag of around three to three-and-a-half years between the designation of a new town, the establishment of a development corporation, recruitment and the completion of the first homes, it is now highly likely that Labour’s New Towns Plan will fail to deliver a single completed home within the current parliamentary term. At that point, the entire scheme will sit permanently under the threat of being dismantled before it has ever truly begun, when another administration takes office.

Scale

We have already established that Labour’s target of 300,000 homes per year is insufficient, and the evidence suggests that Labour will not be able to reach even that target through the current system alone. We know that the private sector is unlikely to reach this capacity on its own, and there is no historical basis for believing it will. In order for Labour to meet its targets, it therefore needs significant success from its New Towns Plan.

The New Towns Taskforce delivered its report indicating a shortlist of twelve potential sites in September 2025. Each site is intended to deliver around 10,000 homes, with a collective delivery of 300,000 homes over the lifetime of the programme. Only a handful of these homes were ever expected to be delivered during this parliament, but with no site formally designated as a new town as of today, that appears increasingly unlikely. The remainder would be delivered over subsequent parliaments, spanning decades. At best, this would amount to around 30,000 additional homes per year from new towns, but it is far more likely to be closer to half that figure. Even assuming no decline in private sector production, this would still leave total delivery at roughly 240,000 homes per year, around 60,000 short of Labour’s own targets, and 360,000 short of solving the crisis in our working lifetimes. The new towns, therefore, cannot be sufficient on their own.

We can see the level of inefficiency more clearly when looking at individual proposals. A recent example is the announcement of 5,500 new homes intended to form the proposed new settlement at Wychavon, near Worcester Parkway. The plans, submitted by Homes England, the government’s housing and regeneration agency, and Summix, a private mixed-use developer, are currently entering public consultation. The scheme aims to deliver the 5,500 homes by 2041. That equates to roughly 360 homes per year, although it is more likely to average closer to 500 homes per year, with the first homes not expected to be constructed until around 2030, based on current lead times.

If this is representative of Labour’s approach to its New Towns model, then we should expect little more than a few hundred, or at best a few thousand, homes to be delivered before the end of this parliament. Even over the longer term, annual increases in supply are unlikely to exceed 5,000 additional homes per year. That is plainly insufficient to tackle a housing crisis of this scale.

Mechanisms

The more important lesson to take from the Wychavon Town plans is what they reveal about Labour’s intended methodology. Labour appears to be continuing with the approach of state-backed, market-delivered housing; a system the country has been trialling for forty-five years with little sign of success. In fact, there is no sustained period on record in which this approach has delivered housing at the level required to meet national need. It represents a continuation of the neo-liberal mindset that now dominates all ends of our political spectrum.

Labour appears to intend for these town plans to proceed through the existing systems of public consultation and local planning, rather than establishing a parallel delivery system. Master-planning is being handled by a private corporation, and there are no signs that an old-style Development Corporation is being created. Construction also appears set to be handled entirely by the private sector, with no indication that construction expertise is being brought back into local authorities. Further, there is no sign of any attempt to regulate land values. That means land costs will remain high, profits will be thin, and local authorities will fail to capture any uplift value to fund infrastructure; a critical issue for councils already operating on some of the lowest budgets in the country. Land value and assembly are identified by the Lyons New Towns Taskforce as major barriers, and while the report advises that steps be taken to address it, there is currently no evidence that any such steps are being implemented.

It is also worth noting that by diverting private sector resources into these schemes, those resources are not being deployed elsewhere, and there is no sign that additional resources are being added to the industry. This likely does not represent additional housing production, merely more managed production. Nothing in this plan indicates any likelihood of a meaningful increase in annual housing output.

In short, this is an attempt to replicate the New Towns programme of the 1940s, 50s, and 60s without using any of the mechanisms that made building those towns possible. It is difficult to see how the current government expects this approach to solve the housing crisis, or even reach their own inefficient targets.

Locations and Labour Controls

A major sign that the current government does not fully understand why the New Towns programmes of the past were successful lies in the approach set out in the Lyons New Towns Taskforce report and now being pursued through schemes such as the Wychavon plan.

The Lyons New Towns Taskforce hopes to create successful new towns by focusing on locations that already exhibit high productivity. The argument is that these places are primed for further growth, and that the primary constraint holding them back is a lack of access to labour. Lyons and the Taskforce argue that by building new towns in these locations, already high productivity will increase further.

What Lyons and the Taskforce appear to have missed is the real genius of the original New Towns system, which deliberately avoided areas of high productivity. As the Taskforce itself acknowledges, high-productivity locations come with serious challenges: ageing infrastructure requiring costly upgrades, high land values, congestion, and existing population pressures. These are expensive and difficult obstacles to overcome. Building in such locations also causes disruption to existing communities, increasing the likelihood of resistance, which brings its own set of delays and complications.

The original New Towns programme often deliberately targeted low-productivity locations in order to maximise the multiplier effect of raising productivity. In these areas, land was cheaper, there was less legacy infrastructure to replace, and it was easier to install modern, state-of-the-art systems from the outset. Populations were smaller, traffic was more manageable, and disruption was limited. As a result, resistance to development was typically lower, and existing residents were often eager for the economic uplift that new investment would bring. This made the new towns cheaper to build, simpler to service, and more politically sustainable.

The logic behind the Lyons Taskforce approach is that placing new towns in high-productivity areas will make them attractive because jobs already exist. The post-war New Towns model took the opposite view. It recognised that low-productivity areas would need job opportunities to attract new residents, and it solved this problem through the combined use of the Distribution of Industry Act 1945 and zoning powers under the Town and Country Planning Act 1947.

Under this system, new or expanding industries were required to obtain an Industrial Development Certificate before opening factories. This allowed the government to direct industrial growth towards new towns and other designated development areas. In many cases, the state went further by constructing so-called advance factories, ensuring sites were immediately attractive to businesses. The result was that productivity was actively redirected out of already overburdened cities and into low-productivity areas where land was cheap and expansion was straightforward. New towns became affordable, economically viable, and attractive precisely because job demand was engineered alongside housing supply. It was this counter-intuitive approach that made the system work and ensured a genuine return in value for the taxpayer.

The Lyons Taskforce reportedly received hundreds of site recommendations, yet opted for these more challenging, more expensive, high-productivity locations. If anyone from the Taskforce happens to be reading this, it may be worth revisiting those recommendations to see whether there are more affordable locations that could benefit from a system like the one that worked so well before.

Design

A further failing of the Lyons approach is the continuation of the existing design philosophy for new towns. Yes, there are modernisations in relation to the use of service hubs, building for the future, and green spaces, but it still relies on the aged model of a high-density centre, followed by a mid-density ring and then, finally, low-density suburbs and industrial parks. The problem with continuing this model is that it has proven increasingly burdensome over recent decades due to changing demographics.

On current trends, Britain is heading towards a workforce-to-pensioner ratio of roughly 3:2 within the next twenty years. The working-age population currently stands at around 43 million, while the retired population is approximately 12.5 million. Over the next two decades, around 19 million people are expected to retire, while projected deaths are around 11.9 million, meaning the retired population is likely to rise to roughly 19.5 million. At the same time, the post-baby-boom generations are smaller, and while immigration can mitigate this to some extent, it cannot fully offset it. Further, Britain has never, in peacetime, been able to sustain workforce participation much above 75%, meaning we are likely heading towards a situation where roughly 35 million workers will be supporting 20 million pensioners. The future of Britain is one with grey hair.

That is an issue that needs solving in another series of articles, but it directly points towards a challenge for our future housing needs. Our new towns will need to accommodate a significant number of elderly people, and we already know that the current design of high-density centres combined with low-density outer suburbs tends to lead to the elderly becoming isolated.

The old, who often have a lifetime of accumulated wealth behind them and tend to own their homes outright, do not typically choose to retire into titchy apartments in dense town centres. They tend to prefer larger spaces, with gardens to relax in during the summer and room to live comfortably. The result is that satellite villages and outer town areas skew older than town and city centres. The effect is isolation from services, increased strain on public systems attempting to reach them, and greater difficulty for older people trying to access care, transport, and amenities. In short, current town design actively works against the needs of an ageing population.

Continuing with the design philosophy proposed by the Lyons Taskforce will simply entrench a problem that is already growing. A different approach is needed. New towns should be designed so that services in the centre are immediately surrounded by an inner ring of low-density suburbs, made up of large bungalows, retirement and assisted-living villages, care homes, and generous green spaces. This actively draw older residents closer to the town centre, where their needs can be met more efficiently. The middle ring could then consist of higher-density housing for working-age residents, with family homes, schools, and youth-focused amenities located on the outer edges.

A further knock-on effect of this is the benefit of the grey pound. There are many towns and villages across the country whose local economies are driven by retired populations, who often have both nothing better to do than spend their extensive means on local services. By bringing older residents closer to town centres, we increase their access to local businesses and drive-up demand for service-based jobs. This creates an initial wave of productivity, which can sustain an area while more significant forms of economic activity are introduced at later stages of development.

Low Social Support

A final criticism of the New Towns Plan as it currently stands is its low target for social housing construction. In the 1960s, around 30 - 35% of the housing stock was social housing, whereas today that figure sits at roughly 18%, far below both demand and need. Lyons and the New Towns Taskforce have advised retaining 20% of homes built in new towns as social housing, which, based on historical experience, would do little to materially change the present situation.

If we are serious about restoring the economic foundations that underpinned the growth of the 1950s and 1960s, a system that captures a far greater share of development in social hands would be preferable.

Conclusion

In summary, Labour’s current New Towns Plan is one in name only. It lacks the substance, mechanisms, objectives, aims, and ambitions of its predecessors. The government is focusing on locations where opposition will be significant and costs will be high. It is doing nothing of note to increase state involvement in the housing sector and is instead drawing on existing private sector resources to achieve minimal gains, likely resulting in a net-zero return.

All of this is being done to preserve the existing neo-liberal approach to housing, while ignoring the egalitarian mindset that delivered the success of the original New Towns programme. We do not enjoy pessimism, but on current trends we expect Labour to fall well short of its 1.5 million homes target and to fail to deliver a single completed new town home during this parliament.

In our next article, we will set out our outline for how new towns and housing delivery in the UK should evolve to achieve the kind of success seen in the 1950s and 1960s, adapted to the realities of the modern world. We will then turn to the other half of the housing challenge: reforming housing finance.