Ikea homes in on the Scots housing market

Published on Friday 1 December 2006 12:48

IKEA, the Swedish flat-pack furniture group, is to start building timber-frame kit homes across Britain to help tackle the shortage of affordable housing.

Scotland will be one of the first regions to see the BoKlok - pronounced BooKlook) homes spring up, with Glasgow earmarked for building behind launch area Gateshead, on Tyneside.

Ikea plans to build 500 homes a year with prices for a flat less than 100,000 and the cost of a three-bedroom house pegged at around 150,000.

Traditionally, pre-fabricated or modular homes have not proven a big success in the UK.

But with property prices soaring, Ikea and Skanska, the Swedish construction group, have teamed up to exploit a gap in the UK market for affordable homes and create mini-communities of affordable housing.

Each BoKlok house is expected to be at least 20 per cent cheaper than comparable homes in the local area, with the homes sited in "transitional zones" between residential and commercial locations that are earmarked for regeneration.

Demand is expected to be so high that the companies involved expect they might have to use certain strict criteria, including a provable income no greater than 30,000 a year.

It is expected, too, that buy-to-let speculators - who have often been blamed for helping pushing house prices beyond the reach of first-time buyers - will be banned from buying.

It is also understood that when the owner of one of the homes moves on, the property will be sold for them by the developer at an open market value to another buyer in the qualifying categories.

The homes will be developed under licence by Live Smart@Home, the commercial property division of affordable housing body Home Group.

Building work is expected to begin in Gateshead early next year, with Glasgow the next targeted area.

BoKlok is the brainchild of Ikea founder Ingvar Kampard. In the Nordic region, 2500 of the modular homes have been sold since they first went on the market in 1996.

But there has been a recent upsurge in interest in the concept in Scandinavia and sales of around 1000 a year are forecast over the next two years.

Ikea said: "BoKlok offers good housing at a low cost.

"They are smart homes, adapted to the day-to-day needs of the modern family."

It said it also plans to host get-togethers for its new communities. "We will host an evening for [the buyers] to get together, almost 'meet the neighbour'."

Alan Prole, managing director of Live Smart@Home insisted that even though the low initial volumes of the UK homes will be around a third more expensive to build than similar style homes offered in Ikea's homeland, the venture was not a loss leader.

"I'm not running a conscience business," said Mr Prole. "We can't make a loss. We will use every opportunity, every means possible to make the thing viable."