John Armstrong: Getting Northern Ireland's houses in order

John Armstrong is the Managing Director of the Construction Employers Federation (CEF). CEF represents the construction industry in Northern Ireland and has over 1,200 member companies.

Below, John writes about the challenges ahead for NI to build enough homes to meet current and future demand; especially in the context of the Department for Social Development’s Housing Strategy.

In Northern Ireland the majority of us are fortunate enough to live in a decent, safe and reasonably affordable home.  A good home underpins so much that we take for granted – shelter and warmth, space for our families to live and grow, and a springboard for our children to develop and flourish, for example.

Northern Ireland is experiencing a serious housing shortage

The Minister for Social Development’s Housing Strategy recognises the need for decent homes and the role that housing can play in helping to support and sustain economic recovery, create employment and help to regenerate some of most deprived and neglected communities.

However, we are simply not building enough new homes and, as a result, Northern Ireland is experiencing a serious housing shortage.  We are still some way off achieving the government recommendation of delivering over 11,000 new homes per annum to meet identified demand, with only around 5,500 homes completed in 2014. 

11,200 new homes needed each year

The Northern Ireland Housing Executive’s [NIHE] ‘NI Housing Market Review and Perspectives’ report combines recent housing market intelligence and draws on the latest statistics compiled by NIHE, government departments and the private sector to determine how many new social houses are needed each year.

Evidence for the need for social housing comes from two main sources: 

• the common waiting list for social housing, and
• the Net Stock Model, which indicates a need for around 1,200 new social homes in each of the next 10 years. 

An additional annual requirement of 800 units is also factored in to address the backlog that has been built up over the last decade, equating to an overall need to build 2,000 new social houses per annum.

The Regional Development Strategy [RDS] via the Housing Growth Indicators identified an estimated need for a total 190,000 dwellings over the period 2008-2025.  Although not broken down to annual estimates within the RDS, this equates to approximately 11,200 new homes a year.

Building homes reaps social and economic benefits

Subject to obtaining necessary budget approvals, there are plans to deliver 2,000 social homes over each of the next three years, with the remaining 9,200 to be delivered as affordable and private market housing.  The positive impact, should such targets be achieved, isn’t just social but will also be economic.

Housing construction can result in a number of profound economic multiplier effects, with research carried out on behalf of the UK Contractors group demonstrating that every £1 spend on construction output generates a total of £2.84 in local economic activity. For every 10 direct jobs in house building, meanwhile, Ulster University estimates that a further seven jobs are supported in the broader economy.

It is vitally important, therefore, that our elected representatives work together to agree an adequate and sustainable budget to enable our local construction industry to deliver these desperately needed homes, and support the wider economy in Northern Ireland.