What Milton Keynes can teach us about housebuilding
Milton Keynes is one of the fastest growing places in the country. This blog looks at what it is doing and what could help it grow even faster
Milton Keynes is one of the fastest growing places in the country. This blog looks at what it is doing and what could help it grow even faster
Milton Keynes has been building lots of houses in recent years. On our recent visit to the city, we explored how it has been doing it.
As Figure 1 shows, over the last 5 years, Milton Keynes has outperformed the rest of the Oxford-Cambridge Growth Corridor and the rest of the country. It has also built houses faster than required by the Government’s new formula – building 2,110 homes per year compared to the new target of 1,720.
Milton Keynes also does well on affordable housing delivery. It ranks 8th out of 296 English local authorities, securing 32 per cent affordable housing across all private developments.
So how is Milton Keynes achieving this, and what could help it do even better?
Milton Keynes has recently started building upward in its city centre. 1,300 new apartments have been built in the last 5 years, increasing residential density in the city centre by 62 per cent.
Milton Keynes does have the (dis)advantage of starting from a very low base – its central district was designed with a lot of car parking space, and it has a number of under/unused commercial buildings. Flipping these and building taller offices and multistorey car parks are relatively straightforward ways to increase city-centre density.
Importantly, though, the local authority isn’t content with its progress so far. The 2024 draft city plan expects an additional 11,000 homes to be built in the central district by 2050. As Figure 2 shows, this would see central Milton Keynes becoming denser than both central Bristol and Manchester are today.
Milton Keynes is growing quickly because it has planned to. For example, its current local plan, adopted in 2019, allocates 17 per cent more land than is required to meet housing targets. This ambition continues in its 2024 draft City Plan, in which it plans for nearly 10,000 more houses than is required by the Government’s Standard Method. At least in ‘strategic’ locations, policies are set out spatially.
A significant part of this growth is to be achieved through urban extensions. And these urban extensions haven’t just been allocated by the local authority – they are being actively facilitated by it.
The local plan sets clear expectations on what the sites will deliver. For the largest extension to the east of the city, the planning authority has produced a detailed supplementary planning document (Figure 3), and secured Government funding for initial infrastructure costs, including the recently completed school and community centre.
Source: Milton Keynes City Council
Even before the New Towns Taskforce requested potential sites for large urban extensions, the 2024 draft City Plan anticipated that this 5,000-home site should ultimately expand to 16,000 homes. A proposal for a further 8,000-home extension to the north of the city is also being discussed. (Note: Milton Keynes Northern Expansion is being promoted by Urban & Civic Plc. The U&C Chief Executive is also Chair of the Centre for Cities board.)
Milton Keynes is a prosperous city that is growing quickly. These fundamentals mean local house prices, while lower than nearby areas (likely a result of consistently high building rates), are relatively high. As discussed in recent Centre for Cities research, these high house prices translate into significant potential land value capture.
And Milton Keynes is doing a good job of utilising this potential. On greenfield sites, its forthcoming local plan requires 40 per cent affordable housing provision, and across the authority it has achieved an average of 32 per cent.
Figure 4 shows that these outcomes are similar to what Centre for Cities modelling suggests is possible, while its neighbours are achieving less.
The only potential issue is the distribution of this affordable housing. As all of it is delivered by developers on-site, the local distribution skews heavily toward greenfield sites, while central build-to-rent developments have returned an average of only 7 per cent. If the city wants mixed housing across the city, it could consider taking some of the greenfield land value capture (Section 106 contributions) in cash to fund direct delivery in central locations.
There is obviously a lot that other authorities could learn from Milton Keynes when it comes to housing and planning, but this doesn’t mean things couldn’t be even better there.
Effective strategic planning requires housing and transport developments to be coordinated, but the local authority currently has limited powers and capacity to do this. This is holding up two important interventions:
A Mayoral Combined Authority which includes Milton Keynes, with strategic planning and transport powers, could help progress both agendas. A mayoral transport authority could coordinate a mass transit system alongside the forthcoming urban extensions to ensure new developments are as car-free as possible. Financing for the mass transit system could also be secured with the knowledge that land value capture on those developments could pay for it. Centre for Cities’ modelling finds that they could generate up to £1.3 billion.
Despite the benefits, a proposal for a Bedfordshire, Luton and Milton Keynes mayoral authority was recently refused for prioritisation by the Government.
Taking Milton Keynes as a case study, there are several lessons for the Government.
First, achieving high levels of housebuilding requires a variety of approaches. It isn’t upwards or outwards – high growth places have to be doing both.
Second, political willingness to grow is crucial and central Government should make the most of it. Where urban extensions are wanted, they should be backed enthusiastically.
And, if Milton Keynes’ experience is anything to go by, a tradition of planned, coordinated growth makes future growth easier. Capacity and expectations developed today can set a course for decades to come.
Finally, when it is established, the mayoral authority that includes Milton Keynes should ensure it enables the city to go beyond its targets by providing the infrastructure it needs.
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