Seven New Towns Announced: What It Means for UK Mortgages

The Seven Proposed New Town Locations

On 22 March 2026, the Ministry of Housing, Communities and Local Government announced seven locations for new towns. Each will be built from the ground up with homes, jobs, schools, green space, and transport links planned from the start:

• Tempsford, Bedfordshire — up to 40,000 homes built around a new East West Rail station, linking residents to Cambridge, Oxford, London, and Milton Keynes
• Crews Hill & Chase Park, Enfield — up to 21,000 homes helping to meet London's acute housing need
• Leeds South Bank, West Yorkshire — up to 20,000 homes capitalising on the city's economic momentum and £2.1bn local transport investment
• Manchester Victoria North — at least 15,000 homes regenerating the heart of Greater Manchester, with a new Metrolink stop
• Thamesmead, Greenwich — up to 15,000 homes on riverside land, enabled by the planned Docklands Light Railway extension
• Brabazon & West Innovation Arc, South Gloucestershire — up to 40,000 homes at the heart of a world-class research and engineering economy
• Milton Keynes, Buckinghamshire — around 40,000 homes expanding the city with a new local transport system, boosting the Oxford–Cambridge Growth Corridor

As LBC reported, six further locations (Adlington, Heyford Park, Marlcombe, Plymouth, South Barking, and Wychavon) were also assessed but will not be taken forward as new towns at this stage.

National Housing Bank Launches 1 April 2026

Alongside the new towns announcement, the Government confirmed the National Housing Bank will launch on 1 April 2026. Backed by up to £16 billion of financial capacity, it aims to deliver over 500,000 new homes and unlock more than £53 billion of private investment.

An additional £400 million over the next decade will subsidise lower-interest loans from the Bank and regional Mayors, directly reducing financing costs for developers and potentially leading to more competitively priced new-build homes.

For buyers, this could mean more choice, more competitive pricing, and better new-build mortgage options as lender appetite grows with increased housing supply.

What This Means for Mortgage Borrowers

The scale of these new developments has significant implications for mortgage borrowers across the UK:

• More new-build stock: Increased supply should improve affordability over time, particularly for first-time buyers in areas like Leeds, Manchester, and London where demand has far exceeded supply.
• Green mortgage discounts: New-build homes are constructed to the latest energy efficiency standards, meaning most will achieve high EPC ratings. Many lenders offer green mortgage discounts — typically 0.05–0.10% lower rates — for energy-efficient properties.
• New-build deposit requirements: Most lenders require a 10–15% deposit for new builds, compared to 5% for existing properties. However, schemes like Deposit Unlock allow 5% deposits on eligible new builds. See our deposit guide.
• Off-plan mortgage timing: Many of these homes won't be available for years. If you're buying off-plan, your mortgage offer will need to last 6+ months. Not all lenders accommodate this — a specialist broker is essential.
• Buy-to-let opportunities: New towns with integrated transport links and employment centres could offer strong buy-to-let rental yields, particularly in areas with growing commuter demand.

Government Schemes Available for New-Build Buyers

Several government-backed schemes are available for new-build purchases in these new towns:

• Shared Ownership: Buy a 25–75% share and pay rent on the remainder. See our shared ownership guide.
• First Homes Scheme: New builds sold at 30–50% discount to eligible first-time buyers and key workers (priced at £250,000 or less after discount, £420,000 in London).
• Deposit Unlock: An insurance-backed scheme allowing 5% deposit on new builds from participating developers.
• Mortgage Guarantee Scheme: Government-backed 95% mortgages on new builds up to £600,000.

As a fee-free mortgage broker, we can help you navigate which schemes you're eligible for and find the best deal from over 90 lenders.

Public Consultation & Next Steps

The public consultation on the proposed locations and draft planning policy is open until Monday 18 May 2026. Final locations will be confirmed later this year after the consultation and Strategic Environmental Assessment.

Four interim advisers have been appointed to the New Towns Unit, including former Development Corporation CEOs and senior property executives, to drive delivery forward. Some new development corporations will also be established to support construction.

If you're considering buying in one of these new town locations — or anywhere in the UK — our advisors can help you understand your borrowing power and secure the best mortgage deal. Get in touch for fee-free advice.