Labour promises wave of new towns if elected. But will they make a dent in UK's housing crisis?

Labour deputy leader Angela Rayner has laid out the party’s plan to deliver a new generation of new towns in a bid to deliver 1.5 million homes in the next parliament and “turbocharge growth”.

Speaking in a speech at the 2024 UKREiiF conference in Leeds on Tuesday (21 May), Rayner said the party will target 40% affordable housing as the gold standard in a series of Milton Keynes-esque new towns around the country.

The plan is part of the first steps Labour would take if, as expected, Keir Starmer is voted in as prime minister at this year’s election.

Starmer laid out his six missions for the party while in government last week and raised eyebrows for omitting a mission to specifically tackle the growing UK housing crisis. Labour said the new town plan is part of its plan to boost economic growth.

“Labour’s new towns are just one part of our ambitious house-building agenda which will see swathes of good quality, affordable houses built in the national interest,” said Rayner, who is also shadow housing secretary.

“Labour’s towns of the future will be built on the foundations of our past. The post-war period taught us that when the government plays a strategic role in housebuilding, we can turbo-charge growth to the benefit of working people across Britain. That is what Labour’s plans will achieve.”

The Big Issue recently investigated the varying degrees of success in new towns built since World War II.

While the country might need 36 Milton Keyneses to solve the UK housing crisis, it’s not as simple as creating “a country of identikit estates” to meet housing need – surrounding infrastructure is just as important.

Rayner laid out a new towns code as part of her announcement to prevent copy and paste developments.

The criteria for developers included building 40% affordable and social housing, buildings with character and tree-lined streets and design that pays attention to local history and identity.

Planners must also include good links to town and city centres, guaranteed public transport and public services as well as access to nature, parks and childrens’ play areas.

Rayner said that the “gummed up” planning system has become a barrier to building, citing figures that show fewer than 70,000 planning applications were approved in England in the last quarter of 2023.

Rising construction costs and falling house prices are also set to mean a sharp decline in housebuilding in the short-term future. Statistics from the National House Building Council showed a 13% annual fall in the number of homes completed in the first quarter of 2024, down to 26,240 new properties.

Rayner added that sites for new towns could be selected by the end of the year.

Reacting to the announcement, Ant Breach from the Centre for Cities said further planning reforms are needed to deliver the 4.3 million homes the think tank found were missing due to system failures. 

Breach said: “New towns as urban extensions for London and other expensive cities could work. But as special places where the normal rules of planning don’t apply, they are also kind of an admission that the planning system in the rest of the country that ain’t a new town is highly restrictive.”

Rayner also said the announcement needs to provide certainty for housebuilders to get building and pledged that Labour would reintroduce local housing targets and “ensure they are met”.

Kate Henderson, the chief executive of the National Housing Federation, said Labour’s plan is needed for a “more strategic approach” to building homes. She added that the post-war new towns programme showed “new communities can be good for the economy as well as society”.

Big Issue Group’s blueprint for change recently called on Starmer and current prime minister Rishi Sunak to build more social housing alongside a series of asks to dismantle poverty and prevent homelessness in the year to come.

But question marks remain on who will build the homes the country needs – 300,000 construction workers have left the industry in the last five years at a time when housing crisis and climate change means their skills are in demand.

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