Who needs internal walls or a fitted kitchen anyway? As house prices soar ever further out of reach, London’s mayor, Sadiq Khan, is to subsidise a new generation of ultra-basic “naked” homes that will sell for up to 40% less than standard new builds.

The apartments will have no partition walls, no flooring and wall finishes, only basic plumbing and absolutely no decoration. The only recognisable part of a kitchen will be a sink. The upside of this spartan approach is a price tag of between £150,000 and £340,000, in reach for buyers on average incomes in a city where the average home now costs £580,000.

The no-frills concept is to be be tested with 22 apartments on three sites in Enfield, north London, where the council will allow builders to take over derelict council estate garages and car parks. Khan has awarded a £500,000 grant to what he says will be the largest custom-build development in London. If successful, a further seven sites will be built.

“The idea is to strip out all of the stuff that people don’t want in the first place,” said Simon Chouffot, one of the founders of the not-for-profit developer, Naked House. “People want to do some of the custom building. We can make it affordable by people doing some of the work themselves.”

The developers are a group of thirtysomethings who found themselves priced out of buying homes in London’s fast-rising property market.

“We are all from generation rent and we have been growing up with this housing crisis,” said Chouffot, 37. “I put down roots in north-east London but it was impossible to buy there. My response has been to live on a boat on the Regent’s canal. The average income in our area is about £40,000 but the average income you need to buy a property is £170,000, so there is a huge affordability gap.”

He said the Enfield homes would be about 15% cheaper to build than standard new homes because of their basic design.

“They will have a functioning sink and bathroom, but what they won’t have is every interior wall or things like fitted coffee machines [which housebuilders often include],” he said.

The ‘naked’ apartments will be built at three sites where the council will allow builders to take over derelict council estate garages and car parks. Photograph: OMMX architects

Costs will be cut further because buyers will not have to pay for the land in the purchase price. The freehold will be retained by the council and owners will pay annual ground rent.

The plan is to ensure that the homes are cheap enough that buyers will only need to spend a third of their gross income on mortgage payments – a widely used definition of “genuinely affordable” housing. Subject to planning consent, the apartments could be ready for occupation in 2020.

But Khan’s decision to back the plans has been greeted with scepticism by the Conservatives in the London assembly. Andrew Boff, who chairs the housing committee, said: “This is not the right trajectory for how we develop housing.

“These don’t look to me to be designed for growing families. They are for singletons and couples. They need homes as well, but if we don’t build larger properties for families we are creating a time bomb in London. There are over 300,000 children growing up in overcrowded conditions and that number is rising.”

The low selling price is nevertheless likely to cause a queue of buyers and priority will be given to people who live and work in Enfield.

L-R, Simon Chouffot, Rachel Bagenal, Harry Dwyer and Neil Double, co-founders of Naked House. Photograph: Martin Godwin/The Guardian

The austere designs fit with a trend for minimal living among millennials forced upon them in part by a lack of disposable income because of high rents and property prices.

A marketing image of the flats features a large toolbox and workbench, a bike propped against a window and books piled on the floor. It is a stark contrast to the vases of flowers and carefully placed scatter cushions of conventional housebuilders’ brochures.

Ahmet Oykener, councillor in charge of housing in Enfield, defended the approach, saying: “Owners can fully customise their home both in terms of fixtures and fittings and layout and the format of the home can evolve to meet a family’s changing needs.”

Khan said: “Community-led housing offers the chance to build new homes Londoners that want to live in. Londoners should be able to play a leading role in building their own communities, but for too long this has been difficult and they have had no support or access to funding.”

David Birkbeck, director of Design for Homes, which researches housing design, said: “We have long overvalued architraves, ceiling roses and whether we have real or laminate wood floors. In the Netherlands they have been selling shell houses for years. Homes are now so costly I would rather people roughed it to avoid huge debt just for the sake of a fitted kitchen. Ikea and a bit of sweat is going to help people avoid negative equity.”