According to research by the Northern Ireland Federation of Housing Associations (NIFHA), hundreds of new homes face an uncertain future due to funding cuts announced in October.
The research from NIFHA found that over the next two years, plans for new social housing in NI could fall by over half from 2,092 new social homes to 1,100, at a time where the social housing waiting list numbers 50,000 people.
The harshest impact is predicted to be felt in the areas with highest need, such as Belfast. The Northern Irish capital is projected to see just 373 homes compared to the 1,026 homes which had been planned.
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Seamus Leheny, chief executive of the Northern Ireland Federation of Housing Associations (NIFHA), said: “The new-build programme in Belfast and other high-need areas is on the brink of collapse.
“You cannot address urgent housing demand by making social housing more expensive to deliver.”
However, these changes will not impact all of NI, and certain areas will in fact receive more homes, although these areas are not the ones with the most acute need. Fermanagh and Omagh, and Mid and East Antrim council areas will see no change in the number of housing schemes, whilst Causeway Coast and Glens will see around 50 additional homes built.
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The Department for Communities (DfC) currently funds around 54% of the total cost of a social housing scheme, which would fall to an average of 46% under the new scheme. In some of the areas struggling the most, including Belfast, that funding will now make up just 42% of the cost.
This gap in funding will need to be filled with alternative means of finance, in many cases leading to additional costs and push many new homes beyond the point of financial viability.
Mr Leheny said an additional £23m of funding would needed to close the gap.
“Our members are facing projects where the additional interest payments, maintenance and management costs combined are more than they will receive in rent, meaning they would make a loss from day one,” he said.
Mr Leheny added that the impact of increased costs may have a wider implications.
“If delivering homes depends on significantly higher private borrowing, then serious discussions will be needed about rent levels and investment in existing properties because borrowing must be repaid,” Mr Leheny said.
