If we want to be a place of prosperity for all, then let’s start with the basics

Seamus Leheny is the Chief Executive of the Northern Ireland Federation of Housing Associations. 

I can still just about remember learning about Maslow’s Hierarchy of Needs back in school. It’s a psychological theory that outlines five levels of human needs from the most basic to the most advanced: Physiological, safety, love & belonging, esteem and self-actualisation. The theory suggests that for any person or civilisation to achieve high-level outcomes, the most basic must be achieved first. The foundation stone for this theory is food, water, sleep, clothing and shelter. Therefore, if we want to empower anyone, especially those facing any disadvantages in life, a home is critical. This is the ethos of all housing associations in Northern Ireland who build communities and homes in sync to produce better outcomes for the people living in them.

The Housing Association sector here is a great example of how public – private partnerships can deliver social good. Typically, Associations have received an average grant from government of around 54% of total build cost for new social housing, then they utilise private finance in the forms of loans from banks to make up the rest required to build homes. Rental income is then used to pay back the resulting loan and interest, with any surplus used for maintenance, upgrades and community support initiatives. Housing Associations are all registered charities and not-for-profit, so the tenants are prioritised in all decisions around investment and management of the homes. Any surplus is treated as sinking funds and used for future repairs and modernisation programmes and should not be considered as capital to spend in new construction. This would risk our sector repeating mistakes of the past such as NI Water and the NI Housing Executive who both have current financial pressures regarding repairs and upgrades of their infrastructure assets, the Minister for Communities Gordon Lyons recently publicly proclaimed his frustrations in progressing his plans to enable the Housing Executive to borrow from Treasury to address this very issue.

The announcement by Minister Gordon Lyons on 27th October that the average grant for a new build social home will be reduced from 54.2% to 46.5% came as a shock to those who deliver much needed social and affordable homes. Some places will fare better dependant on geography and other variables but from initial analysis, places such as Belfast and Lisburn & Castlereagh are hit hardest with grant reduced to 42.55%. The clock is also ticking as these rates come into effect on 1st December so its back to the financial drawing board for many planned housing projects risking delay or cancellation.

If Housing Associations need to borrow more private finance to build, then they have more debts to repay thus the extra money needs to come from somewhere. The only means of income is via the rents paid, therefore such cuts to the grant levels may well come out of the pockets of those who need that money most. Associations will mitigate any increases as much as possible, but they also have a financial and moral responsibility to ensure the viability of their association for current and future tenants.

Up until 2 years ago, local Housing Associations were punching above their weight in terms of housing delivery, developing the highest number of social housing units per head of population versus other parts of the UK and Ireland (approx. 1,500 new homes per year). They have a proven track record of consistently high delivery, as well as raising £100’s of millions of pounds in private finance for new homes. There has been significant uncertainty around budgets this year and if the delays weren’t challenging enough, funding cuts of 12.5% to the grant funding were announced for Belfast, Lisburn and Castlereagh and Ards and North Down.

It is important that communications are backed up by demonstrable real assumptions, so the public can fully understand the implications of the announcements over recent days. For these, cuts will have implications for communities expecting development in their area. How do we do tell the people in places like North Belfast, that has the largest number of individuals on the social housing waiting list (8,189 as of 30 June 2025) and one of the highest levels social deprivation that we’re reducing public funding towards the provision of housing in their area?

This brings us to the question of how our funding for social housing compares to that in Great Britain? Prior to the cuts, Northern Ireland received a similar level of funding to Scotland which receives around 55% grant and Wales, that although has multiple variables, attracts an average grant of 67%. With regards to England, it’s like comparing apples with oranges. In England, they use a high number of Section 106 Agreements for delivery of new social homes and their programme is dominated by affordable or shared-ownership housing which require markedly less public funding. The result is a significant decline in public funding for social housing in England that has now resulted in less social housing delivery. The government now relies more heavily on private funding with the emphasis on delivery of affordable rent (up to 80% of market rent) rather than social homes compared to previous decades. Therefore, any comparisons that can be made to how social housing is funded in Great Britain, either compares us as carrying more of the financial risk or seeing a reduction in the delivery of social housing, that’s led to a significant housing crisis in towns and cities across England.

The reality is that Housing Associations balance risk and opportunity daily. Losses crystalise through upfront site-investigation and pre-planning costs, unrecoverable variations on projects and having to adhere to regulatory requirements on what can and cannot be included in contracts. Taken together these can equate to millions of pounds each year.

Many projects take years to conceive and require extensive community support. The public equate cuts in funding to either a reduced new-build programme and less social homes, or much higher rents.

Those in economic circles will often say Northern Ireland Plc is open for business and no better place to invest in, but where will people live for all the new jobs and prosperity? If we don’t build more, then we create a ripple effect that prices more people out of both the private rental and homeownership markets, leading to greater housing stress. If we want to be a place of prosperity for all, then let’s start with the basics which Abraham Maslow outlined and ensure everyone in our society has the initial building blocks to start from.