The Intermediary – February 2026 - Flipbook - Page 19
SPECIALIST FINANCE
In focus
What the ‘new town’
strategy means
for brokers
L
abour has commied
to building 1.5 million
homes during this
parliament. It was a
central pillar of the
party’s election-winning
manifesto and underlines just how
politically important housebuilding
has become amid the housing crisis.
But many will take such promises
with a pinch of salt. These promises
have been common from successive
prime ministers, and yet annual
targets are almost always missed.
If Labour can buck that trend, it
will be through a detailed strategy
for new-builds, and one is starting
to take shape: creating more ‘new
towns’. The creation of the New
Towns Taskforce, alongside planning
reform and sizeable funding
commitments, signals a clear intent to
accelerate delivery.
There has been some discussion
about what this ambition could
mean for buyers and sellers. Far less
aention has been paid, however,
to what it could mean for brokers.
If housebuilding activity follows
political rhetoric and picks up in
the coming months and years, it
could materially change both the
shape and volume of demand for
property finance.
Moving horizons
The concept of new towns is –
ironically – not new. Post-war
developments such as Milton Keynes
and Stevenage were originally
designed to relieve pressure on
London, pairing large-scale housing
delivery with employment, transport
and social infrastructure. While
their success has varied – they offer a
useful lesson.
For investors and developers,
large, strategically planned
sites can be highly aractive.
Coordinated infrastructure, longterm development strategies and
government backing all point to solid
fundamentals. However, previous new
towns also show that these schemes
should not be viewed as a source
of immediate transaction volume.
Planning processes, infrastructure
delivery and phased construction
oen tie up capital long before real
value is realised. Exit planning is
therefore critical.
New-build risks
Any discussion around new towns
must also recognise that their delivery
will result in more investors buying
new-build properties across the
UK. On the surface, this may feel
like familiar territory for brokers,
but new builds continue to present
specific challenges that need careful
consideration.
Valuation is one such challenge.
New-build properties oen sell at a
premium, with Land Registry data
from September 2025 showing that
the average price of a new build was
almost £100,000 higher than that of
an existing property. For lenders, this
presents elevated risk.
Quality is another important
consideration. Recent analysis
shows that defects in new homes
have increased over the years,
raising the risk that a renewed
housebuilding drive could lead to
investors purchasing properties
that incur unexpected costs further
down the line.
Timing also remains a challenge.
Delays are common, whether due
to planning conditions, labour
shortages or material supply issues.
The UK is currently experiencing a
decline in the number of builders.
Add to this the fact that planning
PARESH RAJA
is CEO at Market
Financial Solutions
permissions fell to their lowest level
since 2012 last year, and it is clear that
investors purchasing new builds are
shouldering some risk.
Higher demand
Increased housebuilding activity is
unlikely to translate into a simple
rise in straightforward finance
needs. Many investors and developers
entering the new-build market will
face uncertainty around pricing,
delivery timelines and exit strategies
– factors that fall outside the comfort
zone of traditional lenders.
As a result, specialist finance is
likely to play a more prominent role.
Short-term funding can offer certainty
where build schedules are tight,
while more flexible structures allow
borrowers to adapt as projects evolve.
For brokers, understanding
when speed and flexibility maer
more than headline rates will be
critical in ensuring clients remain
well-positioned.
Leading the way
In essence, advising on finance at
the outset is only part of the role.
Anticipating delays, structuring
funding around multiple exit routes
and working closely with lenders will
become increasingly important.
As new towns take shape and
new-build activity accelerates, the
brokers who thrive will be those who
embrace complexity, act proactively,
and collaborate closely with investors
and lenders. By doing so, they can
help their clients shape the market
and turn the challenges that new
towns and new builds present into
clear opportunities. ●
February 2026 | The Intermediary
17
