Housing Supply Strategy: Why, When and How?

We have a homeless crisis, and we have crisis in the private rented sector where supply is nowhere near meeting demand. I’ve hesitated to say that Northern Ireland is in a housing crisis. Until recently, I would have pointed to the owner-occupied sector, 70% of homes, as being relatively affordable, with people buying homes here with a much lower salary than in other parts of the UK and Ireland. However, worrying trends now run the whole way through the housing system.

The year ending March 2023 saw the lowest number of housing completions in 60 years. If this continues, affordability will get worse, as will the number of people who are homeless or living in unsuitable property. Despite high interest rates house prices have not fallen. In part, this is because fewer homes are for sale, propping up prices.

This has had a significant impact on affordability.

The Nationwide Building Society affordability ratio (mortgage payments as percentage of take-home pay) was 21% in 2020 rising to 29% in the last quarter of this year. This is nowhere near what it was at the peak of the housing bubble in 2007 where it reached 67%. But still at Co-Ownership we find we’re helping people that previously would get a mortgage without needing our help.

Unfortunately, higher interest rates mean there are some people who cannot afford home ownership even with the help of Co-Ownership. For this cohort their only other housing option is the private rented sector. Rents in the private rented sector have risen at 10% over the last year, and as a sector it generally doesn’t provide the security and quality that families especially are looking for. For those that rely on benefits, pay rent is causing huge financial stress, and in part this will have contributed to the increase in those applying for social housing.

35,000 are on the social housing waiting list, assessed as living in housing stress. This is a 64% increase in the last 10 years, and a 34% increase in the last five years. The housing stress figure is used by the Housing Executive to determine the number of new social homes that are needed. In the last decade the target has been around 2,000 new homes per annum. This target has only been achieved twice in that period, and the average has been 1,686. The funding provided this year will only deliver a quarter of the target. We are not building enough social homes, and we haven’t been for some time. This, in turn, is part of the reason the Housing Executive is facing a funding crisis – due to the amount of money it is spending on temporary accommodation to provide homes for people in waiting.

What is the solution?
The Housing Supply Strategy, developed by the Department for Communities after consultation in 2021 is, I think, a good starting point. It recognises the interconnected nature of the housing system, and that building more new homes is essential but only one part of the solution. It highlights need for the private, public and non-for-profit sectors to work together, and cross-departmental working within government.

The strategy provides a framework for action under five objectives: creating affordable options, prevention of and intervention in homelessness, quality of homes, better place-making and decarbonisation. The target set out in the draft strategy of 100,000 new homes isn’t very ambitious. I expect this will increase when the final strategy is published but it’s more important that we have government wide commitment to delivery.

Unfortunately, the strategy has remained in draft for more than two years, due to the collapse of the Executive and the election that followed. However, since his appointment to Communities Minister earlier this year, Gordon Lyons MLA has made clear his commitment to housing. Finalising the Housing Supply Strategy is a priority, and he has expressed his ambition to secure the support of his Executive colleagues in delivering the homes we need in Northern Ireland.

Co-Ownership looks forward to the launch of the strategy. We will continue to work with government to help people achieve home ownership, adding to the 33,000 people we have helped since 1978.