'So how many houses do we have to build in our city'? This is the somewhat surprised question that has been posed to us on a number of occasions in media interviews for Cities Outlook in recent days. It is not for the Centre for Cities, just as it is not for Whitehall, to prescribe a magic number to answer this question. But a look to Milton Keynes suggests how cities should go about tackling their housing affordability problems.
Milton Keynes has been one of the UK’s strongest city economies in recent years. But unlike many other strongly performing cities, most recent house price data shows that at £219,000 its house prices were not only below the South East city average but also below the English average of £249,000. This is despite the city seeing the strongest population growth of all UK cities between 2001 and 2011, when its number of residents increased by over 17 per cent.
This is partly explained by the pro-development stance taken in Milton Keynes. By allowing supply to move broadly in line with demand – the housing stock increased by 18 per cent between 2001 and 2011, the largest of any English city – house prices are much lower than many other cities in the south east. This in turn makes it easier for people to access the job opportunities that exist within the city’s economy. Despite the large increase in its population, the employment rate in the city remained on average almost six percentage points above the English employment rate over the 10 years.
Milton Keynes' consistent expansion allows it to play an even bigger role in the success of the national economy. Our other strongest performing cities should look to the example set by Milton Keynes to deliver the housing growth needed to tackle the affordability crisis that they face.