Communities Minister today announced a number of
changes to increase the delivery of new social homes across
Northern Ireland.
Following a meeting with the Northern Ireland Federation of
Housing Associations (NIFHA) and representatives of its members,
Minister Lyons has announced an update to the amount housing
associations will receive to construct new homes.
The Minister confirmed that, in the interest of securing the
maximum possible number of new social homes from the Department's
budget, the proportion of grant paid by the Department for
Communities for new social housing starts will decrease. For the
same purpose the Minister has also announced reviews of this
grant and the design standards to which new social homes are
built.
Minister Lyons said: “Given the challenging financial
context, I have made it clear that we must take an innovative
approach to the funding of social homes. I remain committed
to bringing forward proposals on how we can build more homes with
the budget available.
“These changes will achieve better value and more social
homes for those who need them from the budget that my Department
provides towards new social housing, a budget of over £177.5
million in this financial year.”
The changes will update costs and the proportion of grant paid
since the rate was last changed in 2023. To provide certainty and
stability to Housing Associations, the changes will govern the
Department's support for social housing new build from 1
December, 2025 until the end of the 2026/27 financial year.
The changes take account of construction costs, inflation,
rent levels and interest rates. As a result of the changes
announced, the grant provided to Housing Association to enable it
to start building a new social home will on average reduce from
54% of the total cost to 46%.
The Minister also highlighted how the use of Financial
Transaction Capital (FTC) mechanisms could enable housing
associations to access finance at lower cost. Proposals for the
use of government land for building are under consideration, and
would reduce the cost of new social homes.
Minister Lyons continued: “Achieving the Programme for
Government target of 5,850 social housing starts within this
mandate will be extremely challenging given the constrained
budget. Changes must be made; we must achieve more, for
less.
“I am grateful to the Housing Associations for working in
partnership with my Department and the Housing Executive to
deliver the new build programme. I am confident that housing
associations will continue to meet these challenging targets and
to deliver for those most in need.”
Notes to Editors:
- The Total Cost Indicators (TCI) system is used to determine
the cost to deliver social housing: a benchmark is established of
total average costs for acquiring and constructing social homes
across the 11 Council areas. From the TCI, the level of
government subsidy that should apply – the Housing Association
Grant (HAG) rate – is then calculated. This is expressed as the
percentage of TCI supported by HAG. Therefore, the grant paid to
support social housing development is determined by two complex
calculations: the TCI; and the HAG rate.
- The benchmark costs will increase by 13.7 percentage points
on average to take account of changes to construction costs,
inflation, rent levels and interest rates. However, the grant
associated with the development of new social housing will reduce
by 7.7 percentage points on average.
- What this means is that the calculation has taken account of
relevant recent changes to costs and concluded that against these
higher costs, and anticipated higher income from rent, the grant
can reduce slightly.
