First-time buyers struggling to get that vital first foot on the property ladder can now head down to IKEA to pick up a flat-pack home from around £100,000.
But, although these homes have been heralded as the solution to the first-time buyer crisis by the Swedish store, will they really do the trick?
Known as BoKlok, which roughly translated means ‘live smart’, the flats and houses were marketed at the IKEA store in Gateshead, Tyne & Wear, during the first weekend in October.
The BoKlok concept was pioneered in Sweden in the 1990s and has grown in popularity with more than 1,000 of the houses springing up each year across Scandinavia.
The timber-framed homes will be sold with their own plot of land and will be eco-friendly, using renewable materials in the construction and featuring solar panels and geothermal equipment incorporated in the design. All the properties will be south-facing to catch as much sunlight as possible to warm the house.
But DIY enthusiasts will be denied the ultimate challenge as the homes will already be professionally assembled. They will be erected on an area of land set aside in the centre of Gateshead for an estate of around 90 homes and should be ready to move in to by January next year.
Flats will cost between £100,000 and £125,000, two-bedroom houses £132,500 to £139,500 and three-bedroom houses from £150,000. LiveSmart@Home, which is licensed to construct and sell the properties on behalf of IKEA, hopes to expand the project to 12 more sites over the next 18 months.
A way forward
James Cotton, mortgage specialist at London & Country Mortgages, says that homes that are cheap to build, sustainable and eco-friendly seem to be the way forward and this is IKEA’s spin on that concept. “It is good to see private companies getting involved in ways to tackle the housing shortage and looking to offer new types of affordable housing,” he says. “More ideas such as this should result in some interesting innovations as well as competitive pressure to keep quality up and prices down.”
Melanie Bien, associate director at Savills Private Finance, says that more homes being made available at reasonable prices will help first-time buyers. “Much of the problem of the rising cost of housing is caused by lack of supply so more house building is to be welcomed,” she says. “I assume IKEA will ensure that these aren’t all snapped up by buy-to-let landlords; otherwise, it kind of defeats the point.”
Fortunately LiveSmart@Home has already identified its target market and will not be selling to investors or buy-to-let landlords. It has also written a pre-emption clause or covenant which says the homes cannot be sold on for three years – after that LiveSmart@Home will offer a re-sale service whereby the company will buy back the properties and re-sell them on to people in the target market.
Only first-time buyers earning between £15,000 and £35,000 will be eligible to buy the BoKlok homes. Homes will be offered on a shared ownership, below market rent or outright sale basis, with legal agreements ensuring that buy-to-let will be actively discouraged. Page 2
