Belfast Housing. An increase in renovation necessary.

House Extesion Belfast.

Renovation of existing property in NI must be a priority if a major housing shortage is to be avoided. Currently there are only meagre grants available for repairs. These grants are means tested. There are also grants to improve the thermal efficiency of dwellings. For many both forms of assistance would be of benefit. Some contractors can also offer 0% finance for renovation, or can assist in arranging loans for refurbishment, but all such loans are subject to status.  This practice constantly encounters people who simply cannot maintain the house they live in, and we know of many buildings falling into disrepair. This could have dire consequences for future housing availability.

Households are decreasing in size, but are increasing in number. It is estimated that there will be an additional 80,000 households in the next 10 years. That is an increase of 8000 a year plus considerations as to available, and affordable, suitable housing types.  There are approximately 740,000 dwellings in Northern Ireland and if we assume that the average house lasts 100 years then we would need to build 7,500 units per year just to stand still. From the above we can assume that we have to build around 15,000 units a year or increase the useful life of the existing housing stock.

As house prices drop the viability for private sector provision falls. In some areas, and sectors, house prices have fallen by 50%. Though labour costs have also fallen material costs have not, so efficiency improvements cannot match sale price falls. The demand for development sites is therefore low and many are being bough simply in anticipation of future demand rather than with a view to building now. Affordability of housing depends on disposable income, and Northern Ireland is more expensive to live in than many UK regions. In Northern Ireland we spend less on housing than most parts of the UK, and more on food, drink, energy and clothes. Whilst house prices have fallen rates have increased by 50% since 2005 and virtually all other taxes have also increased well ahead of any increase in salaries. Indeed many are experiencing salary falls.

Last year we completed the construction of 6,800 dwellings, down from a peak of 17,800 in 2006. Residential planning applications have dropped from 20,000 in 2005 to 8,300 last year. There is no sign of significant future upturn particularly in the private sector. Construction has been falling year on year for 6 years, and this year does not show any significant improvement. Though there are signs of the decline bottoming out we are at a very low production base, and ability to expand up will be a challenge.

I believe that the total social housing waiting list last year was 34,000. Many may well be duplicate entries, but the figure is alarming. If we are building less than 7000 units a year, and the number of households are increasing we have no prospect of avoiding a major housing shortage unless we either;

  1. radically extend the useful life expectancy of the existing housing stock;
  2. increase construction numbers;
  3. allow, and encourage, multiple households to share the same dwelling.

The grants to allow for a major upturn in renovation do not exist, and there are few tax incentives. Loans to repair are also hard to obtain. Construction numbers will not increase until developers can see clear prospect of profitable sales, and can obtain the finance to build. Multiple households sharing is already happening as grown children live with their parents, but to allow for expansion, and proper provision, there would need to be a radical redrafting of related planning policies.

Most of the above statistics are from the NI Statistics and Research Agency.