The Northern Ireland Federation of Housing Associations (NIFHA) has sounded the sirens on a possible £24 million cut to government funding. Such a reduction would threaten the delivery of almost half of all new social homes planned in the region. Seamus Leheny, the chief executive of landlords’ association NIFHA, said the cut in capital funding would cut the number of houses that could be built by half. This cut will intensify the housing crisis that’s already at a critical level.
In October, Communities Minister Gordon Lyons announced £12 million slashed from the service’s budget. These cuts will decrease the DfC’s contribution to social housing schemes from an average of 54% down to 46%. This funding change comes as nearly 50,000 people still wait on social housing waiting lists in Northern Ireland. The need for such housing solutions has never been more urgent. NIFHA’s research paints a disturbing picture. The UK government’s own analysis predicts that the number of new social homes that are financially viable will decrease from 2,092 to just 1,100.
Leheny emphasized the gravity of the situation. He stated that “the new-build programme in Belfast and other high-need areas is on the brink of collapse.” Only 373 homes are now expected to be built in Belfast – a huge reduction from the initial proposal of 1,026 homes. The effect from these drastic funding cuts is still hard to miss. Lisburn and Castlereagh, too, are worried about setting a precedent. The 291 homes planned in those areas are now at risk of abandonment.
The DfC is responsible for a multi-year capital budget of around £270 million. Unfortunately, almost all of this money is already spoken for on the projects already in the pipeline. The NIFHA calculations say we need an additional £23 million. This funding will go a long way towards closing the gap opened by these cuts and ensuring we can deliver the greatest number of new social homes. In Causeway Coast and Glens, just over 50 are planned. This would increase the total number of planned homes in that area to 301. Fermanagh and Omagh, and Mid and East Antrim council areas, will see no changes to their proposed housing developments. In other words, these areas will permanently stay stuck in their present state.
Minister Lyons has recognized that transformative change will require creative thinking in the face of the drastic new funding paradigm. “We have done extensive work and research on this to make sure that we are putting this grant where it can make the most impact,” he said. He added that his goal is to “achieve better value and more social homes for those who need them,” but he recognized the difficulty of maintaining current standards with reduced funding.
While Leheny welcomed the movement toward a goal, he was doubtful these measures would rise to the occasion. He pointed out that “you cannot address urgent housing demand by making social housing more expensive to deliver.” He further noted that many of NIFHA’s members are facing economic pressures where “the additional interest payments, maintenance and management costs combined are more than they will receive in rent.” This hole would cause massive losses for housing associations right from the start.
He warned that if delivering homes relies on significantly higher private borrowing, it may necessitate serious discussions regarding rent levels and investment in existing properties, as such borrowing must be repaid.
