Council tenants are to be given cash incentives of up to £4,500 to move to a smaller house.
It is hoped the move will ease the current homelessness crisis that saw almost 2000 people - including 1300 children - living in temporary accommodation this week.
"The council desperately needs family-sized accommodation, especially three and four bedroom houses. Whilst we building 500 new council houses, they take time to build," said Cabinet member for housing, Councillor Nigel Long (pictured).
He said there are "thousands" of larger council houses that are under-occupied in Milton Keynes.,
To encourage tenants to take the plunge, the council is proposing a new ‘Downsizing Incentives Scheme'.
It offers financial incentives ranging from £1,500 to £4,500, depending upon the size of the property being vacated.
If the tenant is an older person, the council has pledged to support their move to a bungalow or specialist housing.
Cllr Long said, “Milton Keynes faces a dreadful homelessness problem. There are over 600 families with more than 1300 children in temporary accommodation. Yet we have hundreds of under occupied council houses. "
Plus many older tenants are in properties that are not the best way to meet their needs. They have stairs for
example or an inaccessible bathroom. So it makes sense to encourage tenants to move to smaller and more suitable housing. "
He added: “I believe the new Downsizing Incentives Scheme will help address homelessness and help people to move to more suitable accessible accommodation. It is a good step forward as we build a modern, high quality choice based housing service.”