How to kickstart new towns in the UK

We need more housing, especially more affordable housing. The National Housing Federation estimates that the UK needs to build around 340,000 homes each year, of which 145,000 should be affordable. But the pace of construction tells a different story – with our housing supply now lagging behind that of other countries. 

This deficit has placed acute pressure on the least well-off. Long social housing waiting lists mean that vulnerable families need to move into the private rental sector (PRS), which is often lower quality, less affordable, and less stable than social housing. This results in tangible poor outcomes, which see individuals significantly more likely to suffer from physical and mental health challenges. 

Interest rate increases have slowed down the rate of housebuilding. And social housing providers are already under significant pressure to upgrade the quality of their homes, reducing their ability to take on new developments. 

The UK, though, has a long history of innovative housing movements to draw on – from Bournville in the 19th century to the developments in Poundbury and Nansledan. We believe that a movement of new local placemaking partnerships, supported by a Centre for Placemaking, could kickstart housebuilding in the UK. Instead of the traditional approach where developers and local authorities haggle over individual sites, landowners and local communities would unite to transform larger agricultural areas into thriving towns. 

The recent experience of new town developments in the UK gives a glimpse of what is possible today and the barriers we face. 

The current system places developers at the centre of the housebuilding process. They take on the risk of transforming sites into homes, but benefit significantly from the land value uplift. Each development has its own negotiation with the local authority on the final form, as well as the nature and scope of affordable housing provided. This results in piecemeal sites designed with limited community engagement and significant planning delays and costs for developers. 

A series of partnerships between landlords and local authorities have taken a different approach. Nansledan is on the edge of Newquay, residing on Duchy of Cornwall land previously held by the King when the town was established in 2013. Cornwall and the Duchy used innovative tools in the planning system to overcome common barriers. Using a Local Development Order (LDO) grants permitted rights for developments in an area which match a pre-agreed set of criteria across use and quality. 

It took significant upfront work to agree on these criteria with Cornwall council – however, the result has been reduced pain in the planning process later down the line. As a result, Nansledan has high quality housing, with an increased share of affordable homes and local amenities to help it develop into an economic hub. 

We propose that the government instigates a new wave of local placemaking partnerships by bringing local authorities, combined authorities, and landowners together on a common mission. To support this, the government should establish a Centre for Placemaking. This would have a more extensive remit than the newly created Office for Place – focusing on tax, local engagement, financing, and implementation, alongside planning and design. 

The Centre for Placemaking would sit near the centre of government but have broad representation from the Cabinet Office, local authorities, master planners, and landowners. In line with the Centre for Social Impact Bonds, it would help to formalise best practices and accelerate growth. 

For large landowners, it would create a prototype package that is both alluring and practical. It would: 

• Offer a flexible tenure model, balancing both social and market needs, catering to renters and buyers.
• Explore varied ownership legacies, whether council-driven, landowner-centric, or trust-based.
• Navigate the intricate maze of taxes, from inheritance tax and stamp duty to rollover reliefs.
• Deliver designs that resonate with community ethos, ensuring top-notch quality.
• Set out efficient management processes that are streamlined yet effective.
• Develop financial solutions that are attractive, ensuring the wheels of development keep turning.

For councils and combined authorities, it would support them to:

• Engage the heartbeat of the community, from everyday residents to pivotal institutions like the NHS.
• Fast track CIL/​s106 processes.
• Streamline planning, using tools from Local Development Orders to Rural Exception Sites.
• Set up swift procedures, ensuring no bureaucratic delays.
• Harness central government funding powerhouses like the Affordable Home Guarantee Scheme.
• Implement innovative business models.

And for the government, it would advise on policy initiatives to speed up high-quality developments and incentivise people to work collectively to develop land. 

• More rapid delivery of new housing. These partnerships have vast potential to make a significant dent in housebuilding deficits. Although the scale of each development to date has been small relative to the overall need, 50 ​‘Poundburys’ would generate around 200,000 homes.
• A higher proportion of social housing: Through long-term engagement, reduced planning friction, and a potentially lower land cost, developments can sustain a higher share of sub-market housing. Thirty-five per cent of homes in Poundbury will be affordable. In addition, through thoughtful planning, these homes are built into the heart of a mixed development community, not segregated through separate entrances or located offsite.
• Quality: Long-term partnerships can foster a whole-town approach to town planning. This can facilitate more attractive design, better quality, and improved contributions to local infrastructure. 

Social Finance has been at the forefront of empowering local authorities and large landowners to develop innovative housing schemes. We worked with Enfield Council to establish Housing Gateway, an organisation that now owns over 500 homes in the borough. We supported the Grosvenor Estate to develop supported housing on their estates, and we recently advised the government on a major affordable and social housing financing scheme. 

Social Finance can convene large landowning estates, developers, planners, councils, and central government stakeholders, providing financial modelling, strategic guidance, and actionable planning to deliver impact. We see opportunities within the current system to act now, and we are keen to work with all stakeholders to create a tangible positive social impact for communities alongside economic benefits to landowners. 

If you want to hear more about this policy, and explore how we could work with you as a landowner, local authority, or other interested party to implement this, please get in touch with either Dan Peck (dan.peck@socialfinance.org.uk) or Will Damazer (will.damazer@socialfinance.org.uk).