Haggis

Saw this on MSN - thought it was quite interesting...might help in Jersey (Although if Dandara got hold of it they would still charge 5 trillion for a 1 bedroom flat!)

Can flat pack homes save the housing market?

By Naomi Caine
January 30 2008

If you are a first-time buyer or you earn only a modest income, you are no doubt struggling to get on the property ladder. So does the solution to your problem come in a flat-pack from Sweden?

The average house is unaffordable for first-time buyers in 96% of towns - 466 out of 483 - according to the latest report from the Halifax. So it's little wonder that the number of first-time buyers has slumped to a mere 300,000, the lowest since 1980.

Life is tough too for workers on low incomes, as well as key workers such as nurses, firefighters and teachers. The average house price was unaffordable for five key worker occupations in 70% of towns across Great Britain last year, up from 65% the previous year.


Instructions on the box

Enter the flat-pack property. BoKlok homes are the brainchild of IKEA, the furniture store, in a joint venture with Skansa, a construction group. But don't worry. You don't need instructions and an Allen key. The timber-frame homes are built in a factory and then erected on site. They look pretty impressive, too. They are modern, light and airy, with double glazing, fitted kitchens and wooden floors.

And they could soon be coming to a town near you. BoKlok homes are being developed in the UK under licence by Live Smart @ Home, part of the Home Group, which supplies affordable housing. St James Village in Gateshead is the firm's pioneer development of 93 BoKlok properties. There are 36 one and two-bedroom flats and 57 two and three-bedroom houses, all aimed at households earning between £15,000 and £35,000 a year.

The first block of six flats is almost complete and people could be moving in as early as next month. Neil Shaefer of the Home Group said: "There has been a lot of interest in the flats, which are high-quality at an affordable price."

Relief for new buyers

Just how affordable? The one-bedroom flats are on sale for £99,000. You would pay £120,000 for a two-bedroom flat and up to £150,000 for a three-bedroom house, which is less than the typical price paid by a first-time buyer at £175,093. But that's not all. The development is made more affordable because you don't have to buy a property outright. You can either rent a home or buy on a shared-ownership basis.

BoKlok homes were developed in the mid-90s because of a shortage of affordable housing in Sweden. They have since proved popular and around 800 are now sold each year in Sweden.

So will they catch on in the same way in Britain? We will first have to get rid of a few preconceptions. When we think of pre-fab homes, we tend to think of the properties that were hastily constructed after the Second World War as an emergency response to the acute shortage of housing. They didn't have much architectural merit and they were only designed to last for 15 years, so we imagine prefab as temporary and shabby.

Home sweet pre-fab

The modern version is more appealing - prefabulous, you might say. The Peabody Trust, for example, has won an award for its Baron's Place development of six pre-fab flats in Southwark for key workers in the NHS. In fact, several of the big housebuilders have developed off-site factories producing their own brands, such as Taylor Wimpey's Prestoplan and Persimmon's Space4.

Anyway, what do we really care about? We care about the location, the kitchen and the bathroom. It doesn't really matter whether it was built in a factory as long as it looks nice and is in the right place.

The price of pre-fabs adds to their appeal. It's cheaper to build homes on an assembly line in a factory than on a construction site in the open country.

It's also quicker - and we certainly need to speed up the construction process if Gordon Brown is to fulfil his recent promise to accelerate UK housebuilding from about 160,000 to 240,000 homes a year.

Andrew Scoones of The Building Centre said: "The market is still in its early stages but there are a lot of advantages to pre-fabs, not least that they are potentially cheaper and quicker to make than traditionally constructed homes."

Banks not yet on board
We are not yet manufacturing enough prefabs to make full use of the economies of scale. There is also the potential sticking point of a mortgage. Halifax, the country's biggest lender, is wary of prefabs. A spokeswoman said: "We would be guided by the valuer, who would be considering issues such as structural soundness, security and re-saleability. As with any new method of construction, the lack of an established resale market will make assessment of value more difficult."

The market is in its infancy so we should expect teething problems, but the flat pack home could undoubtedly boost the supply of property in this country, which could ultimately bring down prices to a more affordable level.

Only small comfort for new owners

But IKEA cannot save the market single-handed. The BoKlok homes in Gateshead are built on land that was released cheaply by the local authority. Buyers also have access to subsidised finance schemes.

Miles Shipside of Rightmove, the property website, said: "The pre-fab homes are an exciting concept, but the government needs to address planning regulations, land prices, construction costs and the industry's labour shortage if it is to find a genuine, long-term solution to the lack of affordable housing."

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You aint seen me, Roight...!

Jodie

Great idea although in Jersey i think we pay more for the land than we actually do for the home.

georgetownbhoy

I coudn't afford the box it comes in

Fritz

That is only too true.

A couple of years ago I put an ad in the JEP, offering two -bedroom houses at under £150,000.

My phone was red-hot for a few days.

The fact was, I had actually done the exercise,(materials,labour etc), and at that time could have constructed semi-detached, decent sized units if anyone could provide the sites with planning permission.

I would still have made a tidy profit.

At that time I was working on a project for a private developer who had paid a landowner £95,000 per plot, went on to pay £70,000 per unit for construction, (including roads ,drains, utility services,finishes).


The starting prices for these "Low priced, first time buyer units", was £225,000.

There were more than fifty units, and the project was completed in under 15 months.

"Do the math", (as they say).

Is anyone actually interested in helping first time buyers?

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If you,ve enjoyed it half as much as me, then I,ve enjoyed it twice as much as you.

Haggis

not the states anyway!

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You aint seen me, Roight...!

David Rotherham

Not only is the plot over half the cost of a Jersey house, but market forces mean that cheaper buildings just mean extra developers' profits.
A few years ago, someone was in the JEP boasting about how their new house was really cheap to build using a Scandinavian flatpack system, but when they had finished it, they sold it at a high price, on account of its nice location, opposite the Borsalino Rocque.

UserName

It's all expensive over here. The land is worth a fortune, building materials cost a packet to buy/import, and labour costs aren't exactly cheap either. Then when it's finished, the price is hiked up to whatever the market will bear.
I really can't see how my kids will ever own their own homes here. I'm afraid they'll leave the island - which will really suck.

akki7147

i think, yes!