The Ikeal home

Not content with giving us the massage, ABBA and footballer Henrik Larsson, the Swedes are now attempting to conquer the housing market. IKEA, which already has the world gripped with its flat-packed designer furniture at low prices, has thrown its horned helmet into the affordable homes arena.

IKEA’s current advertising campaign proclaims: “Don’t look at these inexpensive products, you’ll go blind.” The industry can only wait to see if these boasts will be repeated in the housing sector. Rumours have already hit the media trail suggesting that IKEA can build a house for £70,000.

The home furnishings giant joined forces with Skanska in 1998 to create BoKlok (pronounced Bo-klook) to make and market the stylish affordable homes.

Perfect timimg

The UK deal with Hyde Group and Paramount Homes is to build properties for those on lower incomes. They expect to unveil the homes in March and are due to start work on site this autumn. A spokeswoman for Hyde Group wouldn’t give specification, costs and location, although a Hyde newsletter suggests it will be somewhere in Hampshire.

What we do know is that the dwellings will be aimed at those on an income of £15,000 to £30,000. Each home, it has been reported, will come with a choice of interior furnishings supplied by IKEA itself, which will be sold over the counter.

The homes will need to built by specialists, contrary to reports that suggested all you need is an Allen key, a screwdriver and a passing interest in DIY.

However, the spokeswoman adds: “We are still working on the design. It will be similar to those already built in Scandinavia, but designed specifically for the UK market.”

Although the national media picked up the story just last month, IKEA’s attempt to crack the UK housing market has been rumoured for some time now.

So should the industry fear the Swedish giant with its penchant for pine and funny product names?

IKEA’s timing couldn’t have been better, with John Prescott urging house builders to ramp up production, and reformers claiming offsite manufacturing and other Modern Methods of Construction (MMC) to be the only way forward. Around 17,000 dwellings were built through (MMC) last year. But this figure could rise significantly if demand crystallises and production facilities come up to speed. Ninety per cent of homes are still built traditionally, so the off-site market could be vast.

According to Inside Housing magazine, the deal with IKEA emerged only when UK companies like Virgin, Next and Habitat failed to show much interest. Charlie Adams, chief executive of Hyde, told the publication: “I think conceptually it was too difficult for the British companies to link with a housing product. They couldn’t see a commercial advantage.”

we know ikea is good quality, we know it is competitvely pRiced. It’s a win-win situation

Steve Lidgate, chairman of the Housing Forum

Steve Lidgate, chairman of the Housing Forum, believes the arrival of IKEA should not cause alarm.

“We need more affordable housing. What the government is saying is that we haven’t delivered the housing we need, so let’s create an environment where we can encourage people,” he says.

“That encouragement can be in lots of different ways – MMC, encouraging house builders to get involved with registered social landlords, encouraging property companies and non-traditional house builders to get into the market.

Room for rivals

“IKEA is just one of those ideas. It’s a soundbite. Everybody has heard of IKEA. They know it is good quality, they know it is competitively priced and therefore as part of that they can deliver good housing. It’s a win-win as far as the government is concerned.”

But Lidgate warns that the product will have to be robust. “We have got to be careful with the dash for more housing that it doesn’t reduce quality. I do not want my grandchildren to be watching us knock down IKEA or Laing or anybody else’s products that were badly built today in 30 or 40 years’ time.”

Peter Taylor, MD of contractor and developer John Laing Partnership, believes IKEA could be a temporary headache for competitors.

“It may prove to be a short term problem, but in the medium longer term I think we will rise to that challenge. Bear in mind the scale of the problem if we’ve got to deliver another 40,000 homes a year [on top of the 150,000 needed each year] there is room for competition, and one could argue that without the foreign competition assisting, we won’t meet the targets anyway.”

On a more positive note, Taylor believes it could prove to be a wake up call for improved design and more innovation.

Ten years ago, he was using offsite manufacturing techniques in projects such as shops and petrol stations.

“At the time it was in its infancy and to apply that to housing was very difficult because the products were not available to allow the architects to have the flair to make an attractive building. Things have moved on now. “I think competition is a good thing because we can learn and from learning we can apply our knowledge and do it better.”

ThE UK has strict planning regimes. I’m not worried about firms flooding us with rubbish

Andrew Ogorzalek, PCKO

Taylor is satisfied the industry can hit government targets. The main inhibitors are land supply and the planning system.

British building regulations could help repel a Swedish invasion, especially if structural components are made in Eastern Europe. Standards for sound tests are different in Poland and the UK, for example. Andrew Ogorzalek, one of the directors of the architects firm PCKO, believes that a common standard should be used across Europe.

But by the same token, IKEA may take advantage of lower labour and supply costs in Eastern Europe. PCKO’s sister company Free-Dom Systems UK has adapted a modular house-building system from BUMA. Fixtures, fittings and external cladding are installed in a factory in Krakow, where labour is cheaper than in the UK.

But Ogorzalek says UK builders and designers needn’t worry that IKEA or anyone else could suddenly tilt the playing field.

“If the design is not appropriate for certain areas, people will not accept it. So whoever is bringing the product in has got to take that into account. Britain is quite a difficult environment to introduce products due to strict planning regime and products having to fit in. I wouldn’t be worried about people flooding the country with rubbish.”

Great expectations

Tim Venables, of Imperial Business School, London, says there are two pertinent questions. First, are modern methods of construction the way forward for UK house building? And second, does the IKEA system have anything that sets it above systems already in use?

Venables thinks the answer to the first question is yes.

“Customer expectations of new housing are increasing and developers are looking at OSM to provide a higher quality in terms of finish and performance than traditional methods of construction,” he says.

But can IKEA teach its new rivals a thing or two over here? Like everybody else, he doesn’t know. In Scandinavia, more than 1700 apartments or BoKlok homes have been constructed in 50 locations. The one and two bed timber framed apartments are 50m2 and 60m2 with an open floor plan, high ceiling, tiles and bathrooms.

This summer the Building Research Establishment is holding a conference entitled: Modern Methods of Construction Come of Age. It says we don’t need to discuss the benefits of MMC anymore, that there is compelling evidence from many UK projects that show MMC is delivering the homes we all want. For IKEA, the pressure is now on to come up with and deliver an impressive product, synonymous with its brand.

But for now, it would appear that its would-be rivals are not running for cover. As one insider quipped: “Let’s hope the homes are not going to be hard to assemble and you are left with screws wondering ‘where on earth does that one go?’”