Housing secretary will hold new town developers to affordable targets but says there will be ‘some flex’

Discussing the balance between affordable housing and viability, Mr Reed pointed to London, and said the aim of his emergency package was to stimulate the market by “stripping out” unnecessary costs for developers.

Then, if profitability increases, there are mechanisms that can be used to claw back affordable contributions.

Mr Reed said: “The accelerator package that we brought forward for London, for instance, has temporarily reduced a requirement on affordability in order to get the market building. Because 30% of nothing is nothing, whereas 20% of something is some social homes.”

Housing minister Matthew Pennycook said last week that the department will start on a consultation process in February for each of the 12 new towns recommended by the New Towns Taskforce.

Among the 12 areas, the government has said that sites at Tempsford in Central Bedfordshire, Crews Hill in Enfield, north London and Leeds South Bank look most promising.

In yesterday’s inquiry session, Mr Reed was asked by Baroness Andrews whether the consultation process will lead to a “clear set” of placemaking principles for sites as they go forward.

The housing secretary said the taskforce recommended placemaking principles, and the new towns programme will aim to build communities with infrastructure, rather than a “bunch of houses in a desert”.

“We’re trying to build communities with all of the infrastructure communities would want around them, access to green and blue space,” he said.

Last week, Mr Pennycook told MPs that full funding details for new towns “will have to wait” until the government’s final decision later in the spring, but confirmed that funding will come from “within the spending envelope from existing sources”.

Asked about this, Mr Reed said there would be “new funding coming through” in the next Spending Review, and also said that “elements” of the £39bn Social and Affordable Housing Programme will be available.

Elsewhere in the session, Lord Mawson questioned Mr Reed further about London’s “collapsing” housebuilding market, pointing out that estate agents and developers on the ground were not seeing signs of a recovery.

But Mr Reed insisted the sector was “starting to see some changes”, pointing to the latest housing supply statistics, which show an 18% rise in new build starts in the year to September 2025.

He said: “I was at a dinner on Monday night with loads of developers who were genuinely coming to shake my hand and asking for pictures with ‘build, baby, build’ hats on their heads, telling me how much the market is moving.

“I took that as a pretty good straw in the wind. So I’m confident we’re turning the corner on getting the housing market moving.”