The Swedish household name is planning to build up to 162 affordable homes in the English seaside town of Worthing.
The Ikea-owned developer BoKlok will construct the homes if a deal between it and the council is approved.
It has already built 11,000 factory-built homes throughout Scandinavia in Sweden, Finland and Norway.
The homes in Worthing would be used for social housing in areas where the council says there is a shortage of homes and high house price inflation.
The “affordable” homes are said to be priced after calculating how much owners can afford, considering their cost of living.
These would operate under BoKlok’s “Left to Live” payment model, where residents are charged only what they can afford after taxes and living expenses.
Payments — typically around a third of net monthly earnings — would go toward a 25-year mortgage.
BoKlok’s website states it also hopes Worthing will be a start of a major expansion of Ikea homes across the UK.
It says: “We are expanding in the UK and are looking for land.
“Do you have a vacant plot that could accommodate a new sustainable neighbourhood?”
BoKlok distances itself from the flat-packs associated with Ikea, saying: “It is about a high-quality off-site manufacturing process that allows us to assemble them quickly in a safe and sustainable environment, which we know that both employees and customers appreciate.”
The homes are, however, believed to include an Ikea kitchen.
Councillor Kevin Jenkins, Worthing Council’s executive member for regeneration, explained to the BBC: “In this current market, it’s extremely tough for local people who are in full-time work to get on the housing market.
“This proposal could change that, giving these hard-working individuals a genuine chance to buy their own home without having to move out of the town.”
The way the plan would work is that instead of selling land to the developer, the council would receive the homes, lease the land for 125 years and receive ground rent, which should be about 4% on the value of the land.
If the plan goes ahead, building could start by next September and the “first homes dispatched, delivered and erected” in January 2021.
A BoKlok spokesperson said it was a “sustainable, low-cost housing concept … now exploring the UK market for potential sites for BoKlok developments, initially in the south and west of the country”.
“However, we have nothing to confirm at this point in time,” the spokesperson said.