Northern Ireland's Housing Crisis Deepens as Wastewater Infrastructure Fails to Keep Pace

Strategic Insights -

Homelessness has soared to record levels in Northern Ireland, with a lack of suitable housing sites and a failing wastewater infrastructure exacerbating the crisis. Despite a decade of increasing housebuilding costs, including substantial contributions to related infrastructure, the 11 largest house builders in the region have warned that the number of approved housing units in their development pipelines is set to decrease by up to 30% due to chronic investment shortfalls in wastewater infrastructure. The crisis is dire, with annual rent increases among the highest in the UK and a permanent wastewater crisis looming.

Key Takeaways:

  • The 11 largest house builders in Northern Ireland have confirmed that they expect the overall number of approved housing units in their development pipelines to decrease by up to 30% due to a lack of investment in wastewater infrastructure.
  • The housebuilding costs over the past decade, including substantial contributions to related infrastructure, have increased by 40% while margins have fallen by 20%.
  • Build Homes NI has warned that the proposed 'Developer Contributions' to help fund wastewater infrastructure improvements will not address the scale of the funding crisis and will increase costs and reduce housing supply.
  • The group also expressed concerns that the levy will distort the housing market, making lower-priced starter homes increasingly unaffordable to build and encouraging builders to focus on more expensive higher-end private developments.
  • Build Homes NI has warned that the increasing challenge of house building in Northern Ireland is forcing its members to begin looking at alternative opportunities on sites in Great Britain and Ireland.
  • Paul McErlean, Director of Build Homes NI, has stated that the debate around 'Developer Contributions' is a distraction from the real issue of how to fund NI Water properly, and that the consultation is detached from economic realities.

Statistics:

  • The number of approved housing units in development pipelines is expected to decrease by up to 30%.
  • Building costs over the past decade have increased by 40%.
  • Margins have fallen by 20% over the past decade.
  • The proposed 'Developer Contributions' to help fund wastewater infrastructure improvements will not address the scale of the funding crisis.
  • Annual rent increases in Northern Ireland are among the highest in the UK.

Sources:

  • Build Homes NI, "Response to the Department for Infrastructure's consultation on 'Developers Contributions for Wastewater'".
  • Build Homes NI, interview with Paul McErlean.
  • Department for Infrastructure, "Developers Contributions for Wastewater" consultation document.