New towns in London need extra funding, report finds

On 30 June, a senior official at Homes England confirmed that affordable housing in the government’s proposed new towns will be funded through its Social and Affordable Homes Programme.

According to the report, the success of new towns in London relies on “strong leadership” from the mayor and the government. 

“Without this, we risk looking back on the new towns programme as a project that created places with unsuitable housing, poor transport connections and low-quality green spaces, ultimately becoming places where people do not want to live and that make London less green and more vulnerable to climate impacts,” the report added.

To ensure this does not happen, alongside new funding, the committee is calling for new towns in London to come with guarantees that the optimal amount of affordable housing is provided, with social housing being a priority. 

The types of affordable, social and market houses provided should deliver enough family-accessible homes, it said, while public transport must be in place before new town residents moving in.

High-quality green infrastructure should be used to create “climate-resilient and biodiverse” new towns, which should be designed in a “meaningful” way with current and future residents in mind, and with “clear evidence of how this informed all design and planning decisions”.

The committee recommended that the mayor should ensure that each new town is underpinned by a “clear, place-specific set of design principles and a coherent masterplan”, developed at an early stage and co-designed with communities.

Finally, it recommended that government grant the mayor additional powers to use a range of land value capture methods, which could include a “comprehensive land value tax or borrowing against future tax receipts”.

In a foreword, James Small-Edwards, chair of the committee, said the “scale of London’s housing shortage and the pressures” it places on communities and the wider economy “demand action at pace and at scale”. 

He said new towns “can work” but that not all new towns succeed in the way they were intended.

“Across the programme, there were shortcomings in design, an overreliance on the car and, crucially, a failure in some places to provide the transport links needed to connect residents to major centres of employment,” Mr Small-Edwards said.

“Places like Skelmersdale [in Lancashire], which was left without a rail connection to major areas of employment, were thus beset by challenges from the outset almost by design.”

He said it is these lessons that “make this moment so important”, as the new towns now being considered for London are “fundamentally different from those built in the post-war period”. 

“They are not standalone settlements on the edge of cities; rather, they are extensions of London itself, embedded within an already dense and interconnected urban environment,” he said.

“It means London’s new towns must be designed as part of the city’s wider fabric, integrated with existing transport networks and communities. They must complement, not compete with, the capital’s existing development pipeline.”

Responding to the report, Jonathan Seager, policy delivery director at BusinessLDN, said that new towns have a “crucial role” to play in helping to tackle the capital’s housing crisis and “enabling the city to grow”. 

He said: “Innovative funding models will be essential to moving these plans from the drawing board to delivery, so it’s welcome this report backs giving the mayor the powers needed to unlock value from land to help pay for infrastructure investment.

“It’s now vital that the mayor and the government work together to get shovels in the ground as quickly as possible on the new towns programme, including Enfield and Thamesmead in London.”

The government launched a call for evidence on potential new towns in 2024. In March of this year it updated its shortlist to seven sites.