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Analysis: Why demand for new-build housing cannot be ignored

By John Simpson

Published 01/11/2016

More homes are needed for Northern Ireland
More homes are needed for Northern Ireland

House building in Northern Ireland is too low to meet the needs of a growing population, along with the ambition to increase overall housing standards and to begin sensibly to anticipate an emerging need to regenerate homes in areas of older housing which should be replaced.

The most publicised official details on housing need point to over 37,000 households now registered on the waiting list for social housing.

On this list, just under 23,000 households have provided evidence that they are living in housing stress, including 15,000 said to be statutorily homeless.

These waiting list numbers are so high that the current housebuilding rate for social housing of some 2,000 new units each year looks inadequate.

The waiting list figures are so high, and have been continuously high for several years, that their credibility is either in doubt or the official responses have become complacent.

The official Government estimates of the need for more housing, the housing growth assessment, suggests that the housing stress figures are not seen as a key contributor to a search for urgent remedies.

The action plan based on waiting lists for social housing needs to be assessed also taking account of demographic changes and some anticipation of a long-term programme of housing regeneration.

Paul Givan, the Minister with responsibility for housing policies, played a major part in an Assembly debate on housing need on October 18.

He confirmed an ambition in the five years to 2021 to see 9,600 new social homes started. That is just under 2,000 each year. This figure sits alongside an estimate from the Housing Executive (using the 'net stock model' based on population change estimates) pointing to a 'need' for 1,600 units each year. This shows that the net stock model is not an adequate baseline.

In addition to the official efforts to promote 9,600 new houses through social landlords (usually housing associations, where this writer declares an interest), the Minister is also aiming to deliver an enhanced 3,750 additional affordable homes in the current five year period.

A key part in that commitment falls to the co-ownership housing scheme, which helps people link to a rent-to-own scheme which is backed by a £100m Government loan.

Alongside extra social housing, there is the addition to housing through the private (owner-occupied and buy-to-let) market. This latter group has been adding just over 4,000 houses each year.

These figures point to an annual rate of house building of less than 7,000 units each year.

That annual total is too low. Even just allowing for regeneration and replacement at the rate of 1.5% pa, which implies that houses last on average for over 65 years, and a modest increase in population numbers, the annual new build should be nearer to 10,000-11,000 each year.

The present annual rate of new house building falls short of this target.

The implication is that, first, many poorer houses on reaching the end of their useful existence will be retained and, second, the general market will have to deal with demand, which is out of line with supply.

As a result, market prices for private housing will tend to increase faster than if more units were being built and rents in the private sector may rise uncomfortably.

The largest missing factor in the housing market is a positive contribution from the Housing Executive, currently the owner of 88,000 housing units, but no longer building new units.

The Minister has an unfinished piece of business about the future of the Housing Executive. It awaits firm decisions affecting its financing.

The current inaction is, indirectly, contributing to the apparent confusion in both assessing housing needs and, critically, establishing and quantifying the call on Government finance.

While the economy is the priority for Government policy, the social cost of inappropriate housing policies cannot be sensibly ignored.

Belfast Telegraph

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