Furniture chain Ikea has entered the race to build deputy prime minister John Prescott’s £60,000 house by collaborated with housing groups to provide flatpack prefabricated dwellings.

Hyde Homes and Paramount Homes have signed a deal with Ikea subsidiary BoKlok to bring Scandinavian-style timber-framed housing to the UK. The companies are considering sites for the homes, which would cost about £70,000 and would usually be preassembled.

The homes, which will be launched at the end of the month, will be aimed at families with an income of between £15,000 and £30,000. More than 1400 similar houses have been assembled in Scandinavia.

The companies are still involved in adapting designs for the UK market but it is believed that the houses will be simple open-plan, one-bedroom apartments. They are also expected to come with a £250 voucher for a starter pack of Ikea furniture.

Hyde Homes has already established a low-cost modular housing scheme in partnership with Polish contractor Buma. The project, which uses modules prefabricated by skilled workers in a plant in Poland, has been successfully used on the Barling Court scheme in south-west London.

A Hyde spokesperson said: “We will definitely be continuing our work with Buma. We have three new sites on the go in London, and are planning to roll out the scheme in Hampshire and other counties we are working in.”