Watching the open fields flash past the train window, developer Nigel Hugill points out an otherwise unremarkable stretch of countryside that is at the centre of the UK’s housing ambitions.
“Without tempting fate,” he said, he thinks this land along the east coast mainline near the village of Tempsford in Bedfordshire is a leading candidate to be one of the Labour government’s flagship new towns.
Hugill’s company, Urban & Civic, already has options to buy 2,100 acres of land here, enough to build 7,000 homes around the spot where the existing mainline will intersect with the East West Rail project connecting Oxford and Cambridge, recently revived by chancellor Rachel Reeves. If named a new town, the site would grow and could include more than 30,000 homes.
The U&C chief executive does not know, or will not say, exactly what role his company would play in such a grand project. The government’s new towns task force is due to report by the summer on how these huge projects will work, and where to put them.
Inspired by the success of places such as Milton Keynes, now a city of some 300,000, the programme is a key pillar of Labour’s ambition to build more houses than any government in a generation. But earlier attempts by the governments of Gordon Brown and David Cameron to revive the new towns concept faltered, partly due to fierce grassroots opposition to more building.
U&C, bought in 2021 by the Wellcome Trust charitable foundation for about £500mn, provides a precedent for a key question about new towns: who will pay for them?
“In the south east of England, absent what I call structural infrastructure . . . the developments ought to be able to pay for themselves. That is what our developments do,” said Hugill, a 30-year veteran of the property industry.
U&C’s financial model rests on ultimately selling homes to private buyers — and blocks of rental flats to investors — at prices high enough to cover the expensive infrastructure needed for big developments.
This will be harder outside the prosperous south east and will require taxpayers’ money, he warned. “You’d be committing billions, not hundreds of millions, of pounds to the extent you are doing them outside the south east,” said Hugill, who hails from County Durham in north-east England.
But locating all the new towns in south-east England would be politically difficult, as it goes against pledges from both Labour and the Conservatives to spread economic growth across the UK.
Hugill warned against pursuing “levelling up” by locating new towns in regions that need an economic boost. “The danger is that the task force wants to try to do everything, and worry about rebalancing the UK economy . . . which then prevents the ability to deliver in any kind of timeframe,” he said.
The government’s task force has received more than 100 proposals for new town sites, with the largest number in the south east. Despite the “new town” branding, many of the projects are expected to be extensions to existing settlements, which is U&C’s speciality.
Up the train line from Tempsford, U&C’s first development, Alconbury Weald, has now completed 1,100 homes out of at least 6,500 planned for the 1,400-acre site, a former RAF air base acquired from the Ministry of Defence and logistics giant Prologis in 2010. Touring the site, Hugill shows off the cold war era nuclear bunker underneath the former airfield.
It is easy to see why the up front costs of the Alconbury project are high. Hugill points out that each new tree costs U&C £2,000-£3,000 and driving the streets you quickly lose count. He is fanatical about landscaping, insisting on curved roads, irregular street patterns, flood defences, lots of greenery and large corridors of parkland.
The primary school was among the first buildings to open, at the same time as the first homes. Outside — rather than a narrow pavement where parents dodge traffic by the school gate — a large public space allows neighbours to mingle as they wait for their kids, which Hugill says fosters community in the new settlement.
Alconbury already has a café, shops, playgrounds, a cricket pitch and the new headquarters for Cambridgeshire County Council, plus a bustling industrial park. A doctor’s surgery and secondary school will follow soon.
Hugill said building infrastructure in advance is essential to gaining public support, rather than heaping the pressure of extra population on existing roads, schools and healthcare. The idea of a new town at Tempsford already faces local opposition.
“You need to be prepared to invest upfront capital in a way that the housebuilding model doesn’t really allow for,” he said.
To look at, Alconbury sits between the stereotypical cookie-cutter new build development and the historical nostalgia of towns such as Poundbury in Dorset, championed by King Charles. The housing includes the features most often demanded by buyers, Hugill said — garages, off street parking, and “a garden that is big enough for a barbecue and a trampoline”.
U&C bills itself as a “master developer”, a niche business that sources land for housing developments, looks after planning, shared infrastructure and design — and then sells on land parcels to commercial housebuilders.
Its sites generally break even by about the 12th year, and often benefit from Homes England loans to finance infrastructure such as roads, which it later repays. U&C made £62mn in revenue in the year to September, and £7.5mn in profit before tax. This year the company for the first time reported more than £1bn in net tangible assets (NTA) across 20 sites.
Hugill is enthusiastic about the new towns agenda, but worries the government is hoping for too much, particularly the potential for “land value capture” — the increase in value when land is granted planning consent — to pay for things such as infrastructure and affordable homes.
“It is like the holy grail,” he said, but added that “if [land] value capture had the potential that people assumed, then U&C would be worth a lot more than we are”.
Ministers say they want the next generation of new towns to have ambitious targets for affordable housing, as high as 40 per cent. In reality, Hugill said there would have to be a more flexible approach.
Even in the south east, he said the amount of infrastructure required to get many of these sites off the ground would not leave enough money for high levels of affordable housing — unless the government commits funding.
U&C’s sites generally start with just 10 per cent affordable housing, and rise towards 30 per cent over the life of the development.
Ultimately, if the government wants to rally private sector capital and developers behind the new towns project, Hugill argues it will have to be pragmatic about things like location and affordability. “There is a really big danger of the perfect being the enemy of the good.”
