New Towns: Is it worth buying a home in one?

One of the key promises that the Labour Party made in their General Election manifesto was the ambitious plan to build 1.5m new homes across the five-year period of the parliament should they be voted in. 

The British public elected overwhelming in July 2024 for precisely that to happen, not simply based on their housebuilding plans but on a broad spectrum of things that they deemed most important and that the new Labour government was promising.

One of the ways that the government plans to tackle the ambitious plan is the creation of new towns. New Towns are not new since they have their history rooted in the post-war rebuilding of the country after the ravages of the bombing raids during the conflict. 

With so much of the population having lost their homes and being displaced, it was critical that the provisions of the 1946 New Towns Act were put in place quickly. That Act allowed building to occur in places that had not been built on before, thus creating a number of specifically built new towns around the country.

So, it's not a new idea by any means but the appeal is their success in creating the large number of homes in a short space of time, purpose-built to meet the needs of the people who are going to live there. 

But what does it mean from a financial standpoint for those who do buy a home in these new towns? 

The answer may lie in understanding how effective the new town models have been and how the house price growth has been achieved. To this end, Halifax has analysed the position on house prices in all the new towns over the last three decades.

On average, their data shows that house prices in new towns have kept pace with the national average (68% and 69% respectively) over the last decade, which indicates that buying a home in these areas is not necessarily a financial disadvantage in the long-term.

When looking at the data over that ten years, it's new towns in Northern Ireland that top the table, with Wales coming in at the third position.

Here are the findings from Halifax's research for the last ten years:

Source: Halifax, data from 12 months to August 2024

Amanda Bryden, Head of Halifax Mortgages, said: 

“New Towns have played an important role over the years in helping to provide additional, affordable housing options across the UK. 

“With the government's ambitious plan to build a new generation of New Towns, our research shows that while they offer homeowners the potential to benefit from significant price growth, they also present attractive opportunities for first-time buyers. 

“It's vital that a New Towns policy prioritises affordability and sustainability. 

“Placing social and affordable housing options, energy-efficient buildings, green spaces, and accessible public transport at their core would give a clear signal to both investors and developers that these vibrant communities will not only address the current housing shortage, but also contribute to a more sustainable future.”

When assessed over the three decades of the analysis, the parity between house prices taken as an average across the nation as a whole and those for the new towns shows a lag (454% and 441%, respectively), but demonstrates that purchasing in a new town is still a strong investment opportunity. In particular, and perhaps unsurprisingly, it is the South-East regions that generally come out on top.

The following table shows the top ten new tens for property growth in the last thirty years:

Source: Halifax

Halifax also notes that in many of the new towns, properties are being sold at a discount when compared with the surrounding area.

The following table indicates the top ten new towns that have the biggest discount to the regional property price in 2024: 

Source: Halifax, data from 12 months to August 2024

And, finally, when it comes to the first-time buyer, Halifax data shows that there are several new towns that rank well on affordability, which is becoming increasingly important as first-time buyers struggle more and more to get a foothold on the property ladder.

Source: Halifax, data from 12 months to August 2024

If you're thinking of moving home to a new town or anywhere else, you'll need to line up one of the best conveyancers, whose quality and focused service provides significant value for money.

That's where you can rely on the experts at Homeward Legal! 

They will start work on your planned purchase as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process.

There are some unforeseen items that might arise during the purchase and/or sale, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

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