A snapshot of some of the key housing issues for the new mandate: Housing supply and demand

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Good quality, affordable housing plays a significant role in maintaining physical, mental and social wellbeing. Additionally, the housing market is an important driver of economic growth and regeneration. Therefore, it may be a concern that housing supply is not keeping up with demand in Northern Ireland.

A snapshot of some of the key housing issues in the new mandate: an image of houses and money
A snapshot of some of the key housing issues in the new mandate: An image of houses and money (Credit: Images Money, under Creative Commons without modification)

This is primarily attributable to the reduction in the construction of new private sector dwellings. At the height of the market there were around 14,000 new private sector starts (2006/07). In 2013/14 there were 4,415 new starts, although there are slow signs of recovery (5,252 new starts in 2015) (figures from the Northern Ireland Housing Executive (NIHE) ‘Housing Market Review and Perspectives 2015-18’).

The recent Housing Supply Forum report highlights that housing supply has been affected by many issues such as the restricted release of developable land, a significant reduction in the number of local developers and regulatory/timescale issues in the planning process. Failure to address the issue of housing supply and demand will have repercussions across all housing tenures: social housing, the private rented sector and owner-occupation.

The Social Housing Sector

The future of the NIHE; the outworking of the Social Housing Reform Programme; and welfare reform are predominant issues for both the Housing Executive and Housing Associations. There continues to be significant demand for social housing. In March 2015 there were 39,338 applicants on the social housing waiting list, with 22,097 of these in ‘housing stress’. The recent tragic deaths of people who were homeless are likely to prompt a much greater focus on this issue. Rent setting is another key concern as this will influence the ability to fund maintenance and repair programmes, service debt, construct new homes and attract private finance.

The Northern Ireland Federation of Housing Association’s 2016-2020 Manifesto highlights that there are many opportunities for Associations in the new mandate. However, it states the sector requires sustainability in the current level of Housing Association Grant; the release of surplus public land for new homes; a stronger planning policy; an increase in the ‘Supporting People’ budget; and an independent Regulator.

The Private Rented Sector

Almost one fifth of households here live in private rented accommodation, making it the second largest housing tenure after owner-occupation. The recent NIHE publication ‘Housing Market Review and Perspectives’ indicates growth in demand will continue due to the social housing waiting list; housing affordability issues for first time buyers; high unemployment levels; and a rise in the number of people in part-time and temporary employment.

Availability; affordability; changes to Local Housing Allowance; good tenancy management; and housing fitness remain important issues for tenants. For some landlords, financial issues may predominate, e.g. the availability and affordability of mortgage finance; a higher rate of stamp duty; and limits on mortgage interest relief. The Department of Social Development’s recent review of the Private Rented Sector highlights that there are many opportunities and challenges ahead e.g. an enhanced regulatory framework; the potential for institutional investment; greater tenant engagement; and improved housing fitness standards.

Owner-Occupation

The decline of home ownership; a significant decrease in private sector construction rates; mortgage arrears and repossession; and the financing of repairs and maintenance are just some of the challenges for the owner-occupied sector. But there are positive developments. Ulster University’s latest House Price Index Survey indicates that the local housing market is continuing to recover. A greater number of first time buyers are entering the housing market, and generally speaking, problems associated with housing affordability are not as pronounced as they are in parts of Great Britain or the Republic of Ireland.

However, recent analysis by PwC indicates that by 2025, Northern Ireland will experience one of the lowest levels of home ownership in the UK. This will be due to factors such as property prices outpacing income growth; a lack of confidence in the market by developers; and a growth in private renting which will lead to the emergence of a ‘generation rent’. Whilst homeownership is not a panacea, it is an aspiration for many.  Northern Ireland Executive support for social and private sector housing supply and innovative affordable housing initiatives will be critical. The Housing Supply Forum’s report and recommendations are an important reference point for the future direction of local supply and demand.

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