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Assembling deals on flat-pack homes

Brokers might not yet have been asked to find a client a mortgage for their dream home from IKEA but the question could be raised soon.

The latest initiative to help first-time buyers and others struggling with affordability involves the Swedish company supplying flat-pack homes.

Don’t be too alarmed. Your clients won’t be asking you to help them put their homes together as the pre-fabs will be built by consortia of developers and construction firms.

Developments are proposed for a selection of sites in Greater London, Kent, Surrey, Sussex, Tyneside and Central Scotland, where IKEA homes will mix in with more traditional house building styles. It is thought the starting price for these homes will be around 70,000 and they are intended primarily for people on lower incomes.

Over 2,000 homes like this have already been built in Scandinavia as part of what is called the BoKlok AB concept, owned by Skanska and IKEA. The BoKlok concept is to develop and produce space-saving and functional homes offering good quality at a price that enables as many people as possible to afford comfortable homes.

BoKlok UK is the British licensee, comprising The Home Group’s subsidiary, Paramount Homes and The Hyde Group, working in partnership with IKEA.

The homes will have a Scandinavian feel, be of timber frame construction and arranged in L-shaped blocks comprising six or eight one and two bed apartments. They will be similar to those already built in Scandinavia but designed specifically for the British market – and so hopefully the British climate too.

Plans are at an early stage and you would hope the backers have had the foresight to involve lenders and ensure it is possible for aspiring home owners to get a mortgage on an IKEA home. But it is not clear that this is the case as lenders, while not ruling out lending on this style of construction, are not confirming they will.

James Cotton, mortgage specialist at London & Country, is one step ahead. “I asked NatWest about its policy as it already lends on timber frame houses,” he says. “It seems to think it would be OK to lend on these homes as long as they meet all the safety requirements and the surveyor is happy.”

“It’s good to look at ways homes can be built cost effectively,” he adds. “And it’s positive to have a big brand name such as IKEA involved. Anything that can help first-time buyers is welcome.”

Before long it might not just be an IKEA sofa you sit in but an IKEA home. But at least you won’t be left to your own devices with no more than a flimsy guide to help you put it together.rosemarygallagher

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