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IKEA to help tackle the UK's housing crisis

2 MIN READJuly 24, 2019

Homebuyers in Worthing, West Sussex, where properties cost 12 times the local salary (almost double the national average) may soon have a low cost solution from Ikea, after a UK council agreed to work with an affordable housing developer co-owned by the retailer. 

BoKlok, a company jointly owned by Ikea and Swedish construction firm Skanska, specialises on newly built housing that people on minimum wage can afford, and has already built over 10,000 houses across Scandinavia. 

It has currently been permitted by the Worthing council to build 162 of these affordable houses on land that it owns. In return for using the land, the council will be given 30 percent of the homes at cost value to be used as social housing. 

Previous plans to break into the UK market were shot down when the financial crisis hit, but its latest effort sees them beginning in Worthing specifically as data from ONS shows that constituents of the town pay 12 times the countries average salary (£25,458) for a property, and even then only have one-bedroom flats in reach.

‘Under the plans the council will license the developer to use the land rather than selling it off, charging it an annual ground rent. In return it will get 30% of the properties to use as affordable housing to rent to local people, while the remaining properties can be sold by BoKlok based on its “left to live” affordability model’ a press release stated.

This affordability model looks at how much residents can afford to pay after tax and monthly living costs have been deducted. 

In terms of sustainability, Boklok’s strategy has already been remarkably successful across Scandinavia. This is down to their considerably competitive pricing, which is able through their low production costs. All of these properties are built off site, so new flats can be put up in any given location in a single day. Also minimizing the amount of square feet used and omitting amenities that people don’t focus on, they are very cost effective. 

The other big selling point is their environmental awareness. According to the description on their website, “We build our houses of wood - the most climate-neutral building material… we build our areas where it is close to public transport, shops and other services [so you don't have to use the car as much] and we do not build any unnecessary boast square meters.”

The success of this proves once again that both cost efficiency and environmental awareness is one of the most important things in the current market, especially for the next generation of homeowners. 

Read more about the importance of ESG metrics here

For more information and further discussion on the current UK housing market, Europe GRI takes place on 11-12 September in Paris, and GRI Residential Europe takes place on 26-27 November in London.

Article by Matt Harris
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