In a skillet, melt butter over medium heat. Add chopped onion and cook until translucent.
Stir in flour, salt, and pepper. Gradually add milk, stirring constantly until thickened.
Layer half of the potatoes in a greased baking dish. Pour half of the sauce over the potatoes. Repeat layers.
Place pork chops on top of the potatoes and sauce. Cover with foil.
Bake in preheated oven for 60 minutes. Remove foil and sprinkle shredded cheddar cheese on top. Bake for an additional 10 minutes or until cheese is melted and bubbly.
Let stand for a few minutes before serving.
Notes:
For a richer flavor, you can use heavy cream instead of milk.