The two major short-term problems to solve were:

1. To end the power of powerful families and great Lords who might in the future rebel against him.
2. To find a way in which both the Yorkists and Lancastrians can begin to put their differences aside.

In the long-term Henry has to find a way to create a united and strong England with an important role to play in Europe.

Ending the Power of the Lords
Henry abolished all private armies of the great Lords. This became a crime of treason punishable by death for anyone to disobey the royal command.

Henry then taxed the Lords heavily in order to reduce their wealth and to restrict their opportunities to rebel against the King. The money Henry raised by this taxation paid for his own royal army which kept the Lords in check.

This tactic was further strengthened through the 'Court of the Star Chamber'. This was a court of law, run by men loyal to Henry, which tried and fined Lords who were thought to be disrespectful to the King.

Peace between Lancaster and York
This was never going to be easy after long years of rivalry and bitterness. Henry managed to gain some time to put his plans into action by marrying Elizabeth of York, the daughter of King Edward IV. By doing this, Henry showed that it was possible to put family differences aside. This meant that the hatred which had existed for so many decades between the Houses of Lancaster and York could now begin to subside.

The Long-term plan
Henry's policies proved successful. England without the internal conflicts of civil war was able to enter a period of relative peace. Trade improved both within England and with other countries. Henry's vision of a united, powerful country began to take shape. England was able to play an important role in the Tudor exploration of the 'New World'.

Henry VII's great legacy was to lay the foundations for the future development of England as a nation state and for its powerful position in the world.