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UK Housing Review raises questions over NIHE reforms
“Important questions” still need to be answered over the plans to reform Northern Ireland’s housing authority, the Chartered Institute of Housing’s (CIH) annual UK Housing Review has warned.
Matters such as rents, decarbonisation costs and start-up payments for the overhauled Northern Ireland Housing Executive (NIHE) still need to be decided, according to authors of the influential review.
In November, Northern Ireland’s government announced that the NIHE’s landlord arm will undergo a significant restructure in order to address its funding woes.
The NIHE currently faces a £140m-a-year gap between its income and costs, leading it to warn in 2018 that it would need to start “de-investing” in half of its 85,000-home stock if there was no intervention.
A major part of the problem is that the NIHE’s structure means it is unable to borrow for investment without cutting government funding for other public services.
Making the November announcement, acting communities minister Carál Ní Chuilín told the Northern Ireland Assembly that the NIHE would be reclassified “to a mutual or co-operative designation”, enabling it to borrow without affecting the public balance sheet.
But, having returned from a period away with illness, communities minister Deirdre Hargey said earlier this month she will explore a possible way for the NIHE to borrow “without any change” as the “primary option”.
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John Perry, policy advisor at the CIH and an author of the UK Housing Review, said: “The announcement to reform the Housing Executive is a welcome indication of progress in addressing a thorny issue, but the proposal raises several questions in its turn.
“Experience in the rest of the UK has shown that even where substantial backlogs of work need to be addressed, tenant support may be difficult to achieve.
“There are also important questions around what the financial and governance arrangements will be, which will undoubtedly influence the outcome.
“For example, what trajectory of rents will be assumed? What will the freshly assessed cost be to bring all homes up to a high standard, including decarbonisation?
“It seems likely that a substantial dowry payment will be needed, possibly staged over time as happened in Wales.”
NIHE spending on improvements and maintenance of its existing homes has fallen significantly in recent years, the review said, from £178m in 2018/19 to a budgeted £135m in 2020/21.
Justin Cartwright, national director for Northern Ireland at the CIH, said: “It is important that a long-term future for the organisation, its stock and its service to tenants, now takes specific shape within a reasonable timescale.”
The review also suggested that issues besides funding levels are holding back social housebuilding in Northern Ireland.
Net government annual investment in new social and affordable housing in the region has risen steadily over the past eight years, the review said, from £89m in 2012/13 to £132m in 2020/21.
But the number of social homes built in Northern Ireland has averaged only around 1,500 a year over that period – consistently falling short of the 2,000 estimated to be needed by the NIHE.
Ministers have pledged to examine constraints on housing supply in Northern Ireland as part of a new policy strategy.
The UK Housing Review 2021 is backed by financial support from the NIHE, the Scottish government, the Welsh government, Clarion, The Guinness Partnership, L&Q, Settle, Crisis, The Housing Finance Corporation and The Housing Studies Charitable Trust.
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