Policy

Housing

There is now a critical need for new homes to be built – from the positive impact this would have on jobs to how new housing underpins both regeneration and economic growth.

With less than 50% of new housing need having been met consistently over the last decade, there is a very urgent need to act and act now – particularly in respect of private housing.

Issues of note impacting housing

Issue: Northern Ireland consistently builds only around 50-60% of its annual new housing need, resulting in a shortage of housing supply across all types, impacting consumers and exacerbating the housing crisis.

Challenges:

Planning: the current system is badly in need of reform, it is dysfunctional and delays are unacceptable (details below)
Cost of Homebuilding: The cost of homebuilding has significantly increased due to inflationary pressures over recent years.
Cost Uncertainty: Uncertainty in construction costs can raise questions about the viability of housing projects.
Impact on Social Housing: Shortages have contributed to a growing social housing waiting list and difficulties for many in transitioning from renting to homeownership.
Co-Ownership Housing: Despite recent efforts by the Department for Communities to introduce new homeownership models and support Co-Ownership Housing, there has been limited progress in terms of new home starts and completions.
Holistic Approach: Homebuilders cannot separate a variety of costs and risks associated with stakeholders including NI Water and NIE Networks (details below).
Net Zero: Decarbonisation of homes and associated changes to building regulations is adding to cost uncertainties and the fast-changing landscape

Solutions:

Ambitious Targets: The Draft Housing Supply Strategy by the Department for Communities aims to deliver 9,500 new homes annually from 2022 to 2037. Departments should be prompted to explore how to help the industry to ultimately meet targets.
Combating Silo Approach: Stakeholders must view the overall cost and risk of homebuilding comprehensively to address the housing crisis effectively.
NIHE: Implement the Housing Executive fundamental reform program that will lead to its mutualisation and re-enable them to take forward a new build program.
Working with Industry: Uplift to Building Regulations and guidance must be well signposted, introduced gradually and cognisant of factors impacting homebuilding locally.

NI Water

Issue: Increased capital expenditure is needed to address crippling wastewater treatment capacity issues

Challenges:

Lack of Transparency: Insufficient transparency in NI Water's capacity modelling raises questions among stakeholders.
Delayed Upgrades: Delays in upgrading wastewater treatment works contribute to restrictive capacity limitations.
Detailed Planning: A need for more detailed planning to address capacity shortfalls and related challenges, including timelines.

Solutions:

Mutualisation: Mutualisation of NI Water would streamline operations, reduce resource consumption, and increase available capital funds.
PDE Process: Encourage housebuilders to engage with NI Water's Pre-Development Enquiry (PDE) process, facilitating early capacity assessments.
Expedited Solutions: Measures to expedite NI Water's solutions engineering team's work, ensuring faster responses to capacity issues.
Detailed Plans: Require NI Water to provide housebuilders with detailed plans outlining the timing of wastewater treatment works upgrades, enabling them to plan accordingly.
Funding: Commit to funding the entirety of Northern Ireland Water’s PC21, subsequent PC27, and Living with Water capital programs to unlock stalled development.

Planning

Issue: Challenges in the planning system, including dysfunctional performance and delays.

Challenges:

Slow Progress: The Planning Improvement agenda is slow to progress in addressing planning’s systemic challenges.
Responsiveness: Statutory consultees and other stakeholders are often too slow in response to planning applications.
Delays: Frequent delays in the planning process affect confidence, investment, and project timelines.

Solutions:

Planning Act: Substantive changes, by way of a new Planning Act, to the two-tier planning system, which seek to drastically speed up decision-making processes.
Statutory Requirements: Introducing statutory requirements for pre-application discussions and community consultation, ensuring engagement with stakeholders.
Reduced PACC Timeframes: Reducing Pre-Application Community Consultation (PACC) timeframes for major applications, provided meaningful community engagement can be guaranteed.
Mandatory Checklists: Developing mandatory application checklists based on the type and scale of development, enhancing consistency in the application process.
Processing Agreements: Encouraging the use of processing agreements between planning authorities and applicants for major applications, with defined timetables.
Statutory Timeframes: Establishing statutory timeframes for statutory consultees to respond to major applications.
Deemed Consent: Allowing planning authorities to make determinations without undue delay in cases of non-response by statutory consultees.
Timely Requests: Requiring statutory consultees to issue requests for further information within specific timeframes.

NIE Networks/Utility Regulator

Issue: Homebuilders are grappling with escalating costs.

Challenges:

Cost Escalation: The homebuilding sector has witnessed significant cost increases, primarily due to inflationary pressures—the proposed 123% increase to the Single Connection Charge (SCC) adds to unacceptable cost demands that will prevent homes from being built.
Cost Uncertainty: The uncertainty surrounding costs adds complexity to the situation, raising concerns about the feasibility of various homebuilding projects. Costs and associated risks are interconnected, making it challenging for homebuilders to treat them as separate issues.
Accountability: There is often a lack of accountability between various stakeholders, chiefly the Utility Regulator and NIE Networks, with a need to combat a silo mentality and be cognisant of existing challenges.

Solutions:

Socialisation of Costs: As part of connections policy reform, the socialisation of a larger portion of connection costs across the broader customer base, rather than solely charging the connecting customer, should be considered.
Connection Charging Reforms: Given the proposed substantial increase in the Single Connection Charge (SCC), it is critical to re-evaluate the charging methodology moving toward a shallower connection charging methodology, potentially reducing the SCC per dwelling.
Reform in Connections Policy: Homebuilders support the notion of reforming connections policy, as advocated by NIE Networks. Such reforms, particularly those involving a shallower connection charging methodology, can contribute to fairer treatment of new connections and reduce cost and risk uncertainty for homebuilders.
Collaborative Impact Assessment: DfE and UR should work in conjunction with NIE Networks and homebuilders to conduct a joint assessment of how a shallower connection charging methodology would influence the SCC. This assessment should be undertaken before any SCC increases are implemented to ensure fairness in the charging structure.
Comprehensive Cost and Risk Assessment: Stakeholders must collaborate with housebuilders to develop a comprehensive understanding of the cost and risk landscape in homebuilding. This approach is essential for planning and resource allocation.
Benefits for Homebuilders: A shallower connection charging methodology reducing cost and risk uncertainties makes it more affordable to incorporate low-carbon technologies into new homes. This is particularly relevant as we anticipate substantial changes to NI's Building Regulations in 2024.