Opportunity for brokers as Labour's new towns agenda turbocharges demand
Labour’s pledge to deliver 1.5 million homes this parliament, backed by a renewed commitment to getting “spades in the ground and cranes in the sky”, has put housebuilding firmly back on the agenda. The creation of a New Towns Taskforce, tasked with unlocking tens of thousands of homes on large-scale sites, suggests a more structured approach to delivery than in recent years.
For Paresh Raja, CEO of Market Financial Solutions, the political ambition is welcome – but it needs to be viewed through a realistic lens.
“Successive governments have made similar housebuilding pledges, only for delivery to fall short once planning, infrastructure and capacity constraints come into play,” he told Mortgage Introducer. “Against that backdrop, it would be unrealistic to assume this target will be met in full.”
Even so, he believes the direction of travel is clear enough that brokers should start preparing now for an uptick in new-build and development activity.
“The emphasis on new towns and the establishment of a dedicated New Towns Taskforce marks a more structured and strategic approach than we have seen in the recent past,” he explained. “Partial delivery – or at least the laying of foundations that are needed for more meaningful delivery – is certainly achievable.”
From Raja’s perspective, the immediate impact on housing supply will be gradual. Large schemes simply take time to move from allocation and planning through to delivery. But he stresses that finance markets do not need to wait for keys in doors before activity builds.
“Short-term housing supply is unlikely to shift dramatically,” he said. “However, confidence matters. Clear policy direction and visible progress can unlock capital, encourage developer activity and stimulate demand for finance well before homes are completed.”
That, he argues, is where brokers should be focusing: on the pipeline of demand from investors, portfolio landlords and developers that may precede any visible change in local supply.
From macro rhetoric to micro reality
The Autumn Budget reinforced the government’s messaging around delivery, but Raja is frank that conditions on the ground remain mixed. Planning activity is still constrained, many local authorities are struggling with resourcing, and developers continue to wrestle with labour shortages, elevated build costs and uncertainty around delivery timelines.
“Developers are proceeding cautiously,” he said. “But appetite has not disappeared. Well-located schemes with strong infrastructure support and experienced sponsors are still attracting interest. What they need is a clearer view that their developments will get planning permission and that the demand will actually be there once the homes are built – this is something that the government needs to do more to show them.”
Raja describes a market where developers are highly selective rather than retreating altogether. With more certainty from Westminster and from the planning system, he believes that many projects currently sitting on the sidelines could be accelerated.
The same is true on the lending side. Interest in financing new-builds and large-scale schemes is growing, but lenders are proceeding carefully.
“Lender interest is building in a disciplined way,” he noted. “There’s still a recognition that new builds and new towns present an elevated level of risk compared to existing properties. Therefore, there’s a strong focus on quality, viability and execution risk, which is potentially dragging on momentum.”
For brokers, that means demand is there – but that packaging, structuring and lender selection will be critical to getting complex cases across the line.
New-build is not “just another resi case”
As more new-build schemes and new-town opportunities come to market, Raja is keen to challenge the notion that these are simply standard residential cases in a different wrapper.
“A common misconception is that new builds are lower risk simply because they are brand new,” he said. “However, new builds typically involve pricing premiums, longer timelines and a greater reliance on assumptions based on forecasts and the future rather than established market evidence.”
That combination – premiums, extended timeframes and forward-looking assumptions – means lenders will scrutinise new-build propositions more closely than comparable second-hand stock. They will want to understand whether premiums are supported by fundamentals, how incentives are structured, and whether values are likely to hold as more units are released to the market.
Timing is just as important as pricing. Raja warns that delays are more common than many brokers and clients anticipate, and that those delays can have knock-on effects that go beyond nuisance.
“Delays are common, and when they occur, they can place pressure on loan offers, funding availability and exit plans,” he said. “Treating new-build cases as ‘business as usual’ can therefore come with some unintended and negative consequences.”
Brokers need to interrogate the robustness of construction and sales timelines, as well as the resilience of clients’ funding strategies to slippage. For investor and portfolio landlord clients, that includes being clear on whether the exit relies on specific sales rates, valuation uplifts or refinancing windows, and what happens if any of those variables move against them. It also means being honest about whether a client truly has the appetite and experience to manage the added complexity that comes with large-scale or new-town schemes.
Bridging the gap with development exit finance
If there is one area Raja would like more brokers to get comfortable with before 2026, it is development exit finance. Despite its growing relevance, he still sees it treated as a niche product, rather than a core tool in the funding toolkit.
“In practical terms, development exit finance bridges the gap between construction completion and longer-term funding or disposal,” he explained. “It provides flexibility when a scheme is structurally complete but not yet suitable for a traditional mortgage or long-term financial product.”
He points to situations where sales are progressing more slowly than expected, but the original development facility needs to be repaid; where developers want to avoid discounting units just to clear debt; or where a phased exit is preferable to a single, high-pressure repayment point. In each case, exit finance can give developers room to manoeuvre and preserve value.
“For brokers, the key is recognising that the cheapest option is not always the most effective if it compromises long-term outcomes,” Raja said. “Sometimes the key is to find a short-term option that provides the space to select one that truly aligns with a client’s needs or goals – exit finance can do just that.”
Specialist lenders moving centre stage
As product choice becomes more nuanced, particularly for complex or time-sensitive projects, Raja believes specialist lenders are increasingly central to bridging the gap between policy ambitions and on-the-ground delivery.
“In truth, it feels like we are the ones that are filling the wide gap between policy ambition and delivery,” he said. “Traditional lenders simply require more certainty due to the constraints of their criteria, whereas specialist lenders can offer a much higher level of flexibility around structure, timing and exit.”
He acknowledges that this flexibility often comes at a higher interest rate, but argues that focusing solely on the headline cost can be misleading. If a more adaptable structure allows a developer to complete a scheme, avoid heavy discounting or access the full value of their project, it can materially improve overall profitability.
“Bridging finance can support speed-critical transactions or transitional phases, while development finance underpins construction,” he added. “What’s important to recognise now is that these aren’t really specialist products anymore – they’ve become strategic components of well-planned funding strategies in their own right.”
For brokers, the shift is clear. Understanding when flexibility and certainty of execution matter more than the sharpest rate is becoming a defining element of good advice, particularly in the context of new towns and large-scale regeneration.
Risk management: anticipate, don’t avoid
Looking ahead to a potentially busier 2026, risk management will be at the heart of how brokers support both investors and developers. Raja highlights delivery risk, valuation risk and funding risk as core themes.
Planning delays, labour shortages and build cost inflation can all extend timelines and eat into returns, especially where funding structures assume best-case scenarios. Brokers should be pushing for meaningful contingencies in both project budgets and loan terms, rather than treating theoretical timelines as fixed.
Valuation risk is equally significant. New-build properties often command a premium, but that premium can come under pressure as more stock hits the market or sentiment changes. Lenders will be forensic in their analysis of comparables, incentive structures and absorption rates; brokers need to ensure their clients understand how sensitive their exit strategy is to shifting prices while projects are still being built.
Funding risk emerges where borrowers rely too heavily on fixed refinancing windows or a single mainstream lender at exit. Here, brokers can add real value by structuring finance with as much flexibility as possible, keeping multiple exit routes open and working with lenders who understand the realities of development rather than applying rigid, box-ticking criteria.
“Ultimately, effective risk management is less about eliminating risk and more about anticipating it in this market,” Raja said.
Getting “new-build ready” for 2026
So what should brokers be doing now if they want to be on the front foot as activity in new towns and new-build schemes ramps up?
For Raja, preparation starts with knowledge. Brokers who understand planning dynamics, development finance structures and exit strategies will be far better placed as schemes emerge and capital starts to move. Equally, he stresses the importance of building deep relationships with specialist lenders – knowing who can move quickly, who can handle complexity and who can adapt as projects evolve is fast becoming a competitive advantage.
Once brokers can credibly position themselves as bringing that mix of expertise, realism and strategic thinking, he believes they will become indispensable partners to investors and developers navigating the next wave of new-build activity.
“Those who demonstrate expertise, realism and strategic thinking will stand out as trusted advisers in a market where complexity remains the norm,” he concluded. “If 2026 does mark a turning point for housebuilding, the brokers who are ‘new-build ready’ will be the ones who benefit most.”
