Ikea plans cheap prefabricated homes

Ikea wants to sell cheap prefabricated homes in the UK.

The furnishings firm is hoping to link up with the Swedish developer Skanska to offer affordable housing to workers who can no longer afford to live in London.

Ikea has successfully tested the concept in Sweden, where it is selling prefabricated homes with Ikea furniture to the lower end of the market.

Now Ikea is examining the feasibility of bringing Bo Klok, or Live Smart, to the UK.

The company is pitching at a price level of about £70,000 for a one-bedroom apartment, according to reports.

Ikea chief executive, Anders Dahlvig, says the company's starting point is to look at what a single mother working as a nurse could afford to pay per month for accommodation, and then design a house around that budget.

He thinks it will be a particular hit in London, where property prices have made it difficult for all but the highly paid to live. Thousands of affordable homes are deemed necessary.

The idea was mooted in Britain two years ago but Ikea could not find a UK partner to construct the homes.

Now Skanska UK, a branch of the company that has built 750 Bo Klok houses in Sweden, has begun work on a feasibility study to see if the concept can translate to the UK market.