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The Guardian - UK
The Guardian - UK
National
Richard Partington Economics correspondent

Sunak urged to build more new towns to tackle collapse in home ownership

Aerial view of Milton Keynes.
Aerial view of Milton Keynes, one of the new towns developed during the boom in state-backed housebuilding in the 1950s and 60s. Photograph: Paul White/UK Cities/Alamy

Rishi Sunak has been urged to consider a postwar-style programme of new town construction in England to tackle the collapse in home ownership among young adults.

David Willetts, a Conservative peer and former universities minister, told the Commons Treasury committee that failure to increase the supply of affordable homes was among reasons for rising levels of inequality between young and old.

Calling on the prime minister to take radical action as the Conservatives suffer a collapse in support among young adults, he said the government could learn from the boom in state-backed housebuilding during the 1950s and 60s when developments sprung up across the UK in places such as Milton Keynes, Crawley and Warrington.

“The government bought land at agricultural prices, awarded themselves planning permission, built a town, made a profit on it, and put the money into the same project all over again.

“There is a lively debate on this now and I do think we need some initiative like that,” he said.

Aiming to rebuild Britain’s housing stock after the second world war, but also to limit the urban sprawl of London, the New Towns Act of 1946 gave the government power to designate land for new settlements and paved the way for a construction boom. Stevenage in Hertfordshire was the first new town created, with 10 others following by 1955.

Willetts has suggested in the wake of the Tories’ dire performance at last month’s local elections that the party could include a policy of new town construction in its manifesto for the next general election.

There has been a collapse in home ownership among young adults over recent decades. Figures from the Resolution Foundation, the thinktank chaired by Willetts, show home ownership rates for 25- to 34-year-olds peaked in 1989 at 51% before a collapse by half to 25% in 2016. Rates have since risen slightly to 28% by 2019, although this figure remains the lowest level in 60 years.

The centre-right thinktank Onward warned Sunak last week that failure to win over younger voters posed an “existential” challenge to the Conservatives, in a report highlighting falling home ownership among key challenges for the party. However, the party also faces a balancing act to retain support from its older base, amid concern among older voters over the relaxation of planning laws for the construction of new homes.

George Osborne had promised in 2014 a programme of garden city construction, a similar urban planning movement from earlier in the 20th century, where settlements were built as satellite communities to larger cities – including at Welwyn and Letchworth in Hertfordshire.

However, the former chancellor’s vision for the UK’s first garden city in almost 100 years, by the Thames estuary at Ebbsfleet, remains incomplete almost a decade later – with developers proposing a date of 2035 for the building of 15,000 homes.

Willetts said there was not necessarily a tension between policies supporting young adults at the expense of older voters. “I sometimes get accused of being a generational warrior … [But] this is a winnable argument. All the polling evidence is that old people worry their children and grandchildren aren’t having the same opportunities in life they should have.”

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