Memorandum submitted by the Northern Ireland
Housing Executive
1. INTRODUCTION
1.1 The Committee has invited written submissions
to its Housing Inquiry within the Terms of Reference set out in
its letter of 6 February 2004.
1.2 The Northern Ireland Housing Executive
(NIHE) is aware of the intention of the Department for Social
Development (DSD) to provide the Committee with a comprehensive
context statement including roles, responsibilities and relationships.
1.3 NIHE has therefore concentrated on key
trends, issues and approaches relating to the three strands in
the Committee's Inquiry.
1.4 The submission covers:
— Demand for Social Housing.
— Supply of Social Housing.
— Annex 1 : The Programme for Government
Connections between housing and other objectives.
— Annex 2 : NIHE Partnerships.
2. SUMMARY
The Northern Ireland Housing Executive has set
out the main trends, issues and approaches against the three strands
in the Committee's Inquiry.
The Northern Ireland Housing Executive has sought
to highlight five key issues:
— Ensuring an adequate supply of land
for affordable housing;
— Ensuring the social new build programme
reflects the scale and nature of projected housing need;
— Ensuring the delivery of the social
new build programme;
— Ensuring opportunities presented
by the growth in private renting are used to address housing stress;
and
— Ensuring housing investment achieves
improvements in the quality of housing and addresses wider objectives
in the Programme for Government.
NIHE has set out a summary of its main views
on these issues under:
— Planning Policy/Systems;
2.1 Planning Policy/Systems
— The outworkings of PPS12 (currently
at draft stage) is critical in sustaining the supply of land for
affordable housing
— The proposed NIHE role as technical
advisor to the Planning Service with responsibility for Local
Housing Needs Assessments (which will accompany Development Plans)
will provide:
— Independence in analysis and views;
— Sensitivity to local market needs;
and
— Objectivity at a strategic and local
level.
— Strategic planning models and local
needs assessment methods (including latent demand testing) have
identified housing requirements; and the mid-term review of the
Regional Development Strategy affords the opportunity to influence
future production targets for affordable housing.
— NIHE believes progress towards higher
density development, particularly small units, will accelerate
based on existing plans; and in conjunction with Housing Associations,
NIHE will continue to promote such developments within local communities.
— Modernisation of the Planning Service
in Northern Ireland is welcomed as a means to reduce timescales
particularly in development control.
2.2 Supply Systems
— NIHE believes the structure of the
housebuilding industry is well matched to local market requirements
although there are issues around the future skills base of the
industry.
— NIHE believes the delivery of the
social new build programme is essential to reduce housing need;
and NIHE will continue and enhance its support role to housing
associations through its land identification role, strategic acquisitions,
land release and potentially as a procurement partner.
— NIHE believes partnering with specific
housing associations in strategic locations has the potential
to accelerate development.
— NIHE believes the review of aspects
of the House Sales scheme being undertaken by the Department for
Social Development is timely.
— NIHE will continue to develop methods
to use private renting to address housing stress; and will track
the effects of the proposed Property Investment Funds.
2.3 Improving Quality
— Investment patterns to provide better
quality housing and neighbourhoods continue to change to reflect
changes in conditions and priorities.
— Studies, commissioned by NIHE and
DSD into strategic options and maintenance investment are at draft
stage and take account of alternative delivery models and different
levels of housing standards.
— Strategic targeting of assistance
to rural areas and housing in multiple occupation is being implemented.
— Urban renewal programmes continue
to be advanced to address poor living conditions and market failure.
— Fuel poverty, across tenures, is
considered a priority and is being addressed in particular through
fuel switching.
— Investment levels to improve accessibility
for elderly and disabled people remain high to match the level
of demand.
— Housing investment programmes have
strong links to other objectives in the Programme for Government.
3. DEMAND FOR
SOCIAL HOUSING
Background
3.1 Spatial and structural change in the
social housing market has been ongoing. This reflects the demographic
forces which have been driving the housing market generally including
household growth, reductions in household size and social trends.
These and other factors are, however, having a differential impact
across Northern Ireland.
3.2 Different characteristics and dynamics
are evident as social housing demand is segmented into sub-markets.
3.3 In particular—
(a) the overall increase in demand comparing
1993 to 2003 (13% in total waiting list; 26% in housing stress)
masks increasing rates of transitory applications; higher levels
of applicants satisfactorily housed or with minimum need; and
the impact of a common selection scheme.
(b) Housing stress is no longer dominated
by housing conditions but rather social factors (illustrated by
a three fold increase in single homeless, related primarily to
relationship breakdown).
(c) The rate of household fragmentation through
divorce/separation is stabilising and remarriage rates are rising.
However, the number of younger single people in housing need is
on the increase.
(d) Distinctive geographic and household
structure patterns have emerged:
— Clear east/west divide with housing
stress heavily concentrated in the urban east and Derry City;
and pockets of rural demand in the west.
— Within the urban east intense housing
demand exists, although in different forms: with North and West
Belfast driven by family demand and a youthful population structure
to sustain such demand; in South Belfast driven by single demand
and higher levels of neutral space (in the religious sense); in
East Belfast through a mix of elderly/single demand; and in Lisburn
through a mix of single and family demand.
— Family demand is increasingly dominated
by lone parents signalling a likely long term propensity to need
social housing and raising issues around the concentration of
deprived households in new developments.
— Low mobility rates characterise most
sub-markets and are reinforced by segregation. Patterns of economic
growth and changes in household type could change this but such
change is likely to be slow.
— Housing stress is most acute in North
and West Belfast, West Derry/Londonderry and East Belfast.
(e) Demand for supported housing has switched
from the elderly to other vulnerable groups and while the scale
is small it represents a priority in health, social and resource
terms.
(f) Elderly people on average wait twice
as long (on the waiting list) as other households reflecting the
strength of locational preferences and supply issues.
Issues/Approaches
3.4 The forms of NIHE market research and
analysis to support strategic planning for the social sector recognise
its interaction with the rest of the market particularly in respect
of affordability, house-builder behaviour and economic and social
trends.
3.5 Macro planning for social housing in
Northern Ireland uses a methodology developed by the University
of Ulster and University of Cambridge. Future requirements (1,750
units per annum) incorporate under delivery against targets in
previous years.
3.6 Strategic social new build investment
requirements are agreed annually between NIHE and the Department
for Social Development to reflect the relative priorities of urban
renewal, general needs, supported housing and rural need.
3.7 Housing mix is determined by NIHE in
conjunction with Housing Associations on a scheme by scheme basis
and may, dependent on location, require consultation with local
residents. (Resistance to higher density developments remains
strong but is eroding through examples of good design).
3.8 The NIHE strategic planning model is
supplemented by its:
— Annual District Housing Plans which
identify social housing requirements at a local level together
with regeneration requirements.
— Sectoral studies and strategies for
specific sub-markets which incorporate analysis of mobility patterns
(particularly arising from private sector new build) for example,
North Belfast and Greater Shankill.
— "Supporting People" needs
analysis undertaken by commissioning bodies including housing,
health and social services officials.
3.9 An emerging issue of affordability was
identified through research carried out by NIHE. NIHE in conjunction
with other stakeholders is developing a methodology to measure
affordability at District Council level which it intends to deploy
as part of its "Technical Advisor" role to the Planning
Service proposed under PPS12 (Housing in Settlements).
3.10 NIHE also undertakes applied research
to understand better the reasons for changes in the scale and
structure of social housing demand. In particular, the increase
in single homelessness is primarily accountable for continuing
levels of housing stress. Investigation into this issue has focussed
on its scale and distribution and characteristics of the "long
term" homeless. It is being extended into its relationship
with the social security system, "repeat" demand, and
the extent to which some temporary accommodation operates as permanent
housing.
3.11 The changing nature of demand presents
challenges for the management of the social housing stock. Design,
tenure integration and intensive management arrangements assist
in meeting these challenges.
3.12 In brief—
— Strategic planning models and local
housing market assessments continue to be refined to reflect changes
in demand and associated house price and supply issues.
— The market intelligence and "Technical
Advisor" roles undertaken by NIHE (in liaison with the Department
for Social Development) are strengthened by NIHE's local operational
presence.
— Applied research particularly around
applicant behaviour (including homelessness) affordability, and
mobility will continue to be undertaken.
4. SUPPLY OF
SOCIAL HOUSING
Background
4.1 The Northern Ireland economy has until
recently had a different pattern of growth to other regions which
created different tenure trends. The sale of social housing made
a significant contribution to changing the pattern to favour owner-occupation.
4.2 Measuring the impact of the decline
in social housing covers:
— establishing the existing and projected
relet rate;
— any changes to alternative sources
of supply; and
— the nature of the loss of supply
through house sales.
4.3 In particular:
(a) Delivery of the social new build programme
has been problematic in recent years.
(b) Over 100k social rented properties have
been sold. These have been primarily houses. This reflects house
sale policy restrictions and a lower propensity to purchase flatted
accommodation.
(c) Despite house sales, the relet rate of
social housing has stabilised, at around 8,000 per annum.
(d) The turnover rate of social housing relative
to supply has been growing. This reflects the profile of stock
(higher percentage of small units) and the profile of demand (higher
percentage of small households). Single people receive a higher
share of allocations relative to their share of demand.
(e) The resale of former NIHE properties
has been low at 22% and less than 10% of properties sold have
been "recycled" for private renting.
(f) These patterns are likely to change with
turnover reaching an optimum level; "flat" sales are
likely to rise to reflect their relative value-for-money; and
re-sale, driven by generational change, producing higher rates
of re-cycling into rental.
(g) Vacant stock in the social sector is
primarily related to urban clearance, interface areas, unpopular
building forms and areas of oversupply, arising from new town
and growth centre developments.
(h) Co-ownership has operated as a cost efficient
bridge between tenures for lower cost housing.
(i) The affordable private renting market
(measured by receipt of housing benefit) has been growing at the
rate of 2,000 units per annum since 1999. This growth has been
primarily in areas with lower social housing demand.
(j) The growth in the private rented sector
is sometimes operating as complementary supply but more so as
competing supply. These growth trends are being driven by small
investors and house-builders seeking to main output levels by
using private renting to "soak up" excess supply.
(k) Given that rental yields are not excessive
the trend in private renting has been mainly supported by high
capital appreciation.
(l) The future pattern of "buy-to-let"
and "build-to-let" is uncertain given the variety of
financial, market and behavioural factors at work. More importantly
given its reliance on housing benefit the private rented market
may struggle to make a greater impact in higher demand areas,
except at the expense of low cost owner-occupation, or through
raising housing benefit levels. The introduction of Property Investment
Funds could become a significant supply driver.
(m) Sustained private new build rates (10-11k
per annum) conceal upward trends in second homes and the private
renting growth (including student demand) mentioned earlier; and
house price inflation with reductions in access to the market
for first time buyers.
(n) The structure of the housebuilding industry
has changed to match market conditions and reflects its high level
of local knowledge—low cost, inner city, brownfield, apartment
and suburban greenfield specialists have targeted market segments
and localities.
(o) The geographical supply patterns show
sustained growth in the main transport corridors and fluctuations
in Belfast (reflecting a temporary over supply in the apartment
market).
Issues/Approaches
4.4 NIHE views the outworkings of PPS12
(currently at draft stage) as critical in the medium term to the
supply of affordable housing. While the Regional Development Strategy
is planning-led and seeks to spatially direct housing growth NIHE
sees its Local Housing Needs Assessment as demand driven and responsive
to local market signals.
4.5 NIHE sees itself as providing a challenge
and advocacy role for Development Plans; and seeks to ensure land
release matches local need. This accepts that the Development
Plan must take account of competing land uses and environmental
considerations.
4.6 In addition NIHE considers that reductions
in time-scales for the Development Plan and Control processes
are essential to sustaining supply particularly on more difficult
sites.
4.7 The mid-term review of the Regional
Development Strategy offers an opportunity to influence provision
for affordable housing and in particular discount the impact of
second homes and investor markets.
4.8 Continued and enhanced support will
be provided by NIHE to the housing associations in the delivery
of the social new build programme. While NIHE is confined to direct
acquisition in strategic locations or where land assembly is problematic
its land identification role is being extended. Currently this
is focussed on its undeveloped land portfolio to ensure existing
low cost opportunities, particularly in or adjacent to social
housing areas, are maximised. The gradual shift towards increasing
the supply of small as opposed to family housing through the social
new build programme will continue. Larger, high density schemes
for single people are planned.
4.9 Mixed tenure models of provision have
been successfully implemented by NIHE and Housing Associations.
Further opportunities to apply such schemes will be created. In
strategic locations NIHE takes the view that partnering with specific
housing associations could accelerate development. In addition
some developers have expressed interest in constructing social
schemes with grant aid.
4.10 Access to private renting for social
applicants in housing stress is being developed through partnership
arrangements with the voluntary sector ("Smartmove").
These schemes will be evaluated as a potential alternative source
of supply for homeless applicants although it is acknowledged
this re-directs rather than increases supply.
4.11 On a separate but related issue the
relationship between housing benefit levels and expansion of private
renting is being researched further particularly in the context
of a move towards Standard Local Housing Allowance and the introduction
of Property Investment Funds.
4.12 While the sale of social housing has
assisted in stabilising estates NIHE accepts that the long term
implications require the current scheme to be reviewed. NIHE believes
that the Department for Social Development's review of aspects
of the scheme is timely.
4.13 In brief—
— NIHE views the outworkings of PPS12
as critical in the medium term to a sustained supply of affordable
housing.
— NIHE (as Technical Advisor) sees
its role as advocate and challenger to Development Plans to ensure
land release meets local needs.
— NIHE will provide additional support
to housing associations in the delivery of the social new build
programme through an enhanced land identification role (including
opportunities for mixed tenure development).
— NIHE believes that the Department
for Social Development's review of aspects of the scheme is timely.
5. QUALITY OF
HOUSING
Background
5.1 Housing quality indicators in Northern
Ireland while primarily built around statutory unfitness and disrepair
measures have also taken account of market failure, decent homes
standards (adopted in other Regions) and accessibility standards.
Other indicators are used to reflect the connections with other
Government priorities including health, safety and fuel poverty.
5.2 A general improvement in housing quality
has been and continues to be achieved. This has been confirmed
by an independent study into the effectiveness of past expenditure.
As the patterns of need change investment targets are also changing.
5.3 In particular—
(a) Unfitness levels have reduced to 4.9%
primarily through urban renewal and renovation grants although
rural unfitness remains high.
(b) Urban renewal (in contrast to other regions)
has been maintained. Intervention programmes in failing markets
based on rehabilitation/improvement to private stock were in the
most part abandoned in the late 1980s.
(c) While in absolute terms the greatest
number of properties unfit or in disrepair are in the owner-occupied
sector in relative terms the problem is most acute in the private
rented sector.
(d) Houses in multiple occupation raise issues
around physical conditions, health and safety and management.
(e) Properties failing to meet the "decent
home standard" (as adopted in England) vary by tenure from
23% owner-occupied, 47% private rented to 49% NIHE stock.
(f) The geographical distribution of "non-decent"
homes is broadly consistent.
(g) The reason for failing the "decent
home" standard is also consistent with thermal comfort accounting
for 88% (rising to 97% in NIHE stock).
(h) Physical accessibility issues related
to age and disability have grown in recent years across all tenures.
Issues/Approaches
5.4 In respect of NIHE stock investment
requirements and strategic options NIHE jointly commissioned a
study with DSD based on the business planning framework and methodology
set by ODPM for use by local authorities in England. The 30 year
projection includes the costs of strategic and management functions.
The study is currently under consideration by the Department for
Social Development.
5.5 In addition NIHE has undertaken a study
of its future Maintenance Investment Strategy based around decent
homes standards, health and safety rating standards and a housing
quality standard which includes accessibility and environmental
considerations. This study is currently with the Department for
Social Development for consideration.
5.6 Within the private sector strategic
targeting of assistance for rural areas and Houses in Multiple
Occupation is being implemented. The new discretionary renovation
grants regime has afforded better opportunities to effect targeting
and is complemented by replacement grants in rural areas (a policy
specific to Northern Ireland).
5.7 Urban renewal programmes continue to
be pursued within Belfast to address poor housing conditions and
market failure. These programmes are advanced in the first instance
through Housing Market Profiles to ensure the market is not disrupted
during the period of investigation. NIHE is aware of the changing
tenure structure of some older markets as they go through a cycle
of private renting to owner-occupation and back to private renting.
While NIHE acknowledges that this is fundamentally changing the
social fabric of those areas, it is nevertheless sustaining the
area housing market.
5.8 Neighbourhood renewal programmes align
closely to areas identified through the Department for Social
Development's strategies for Belfast, Derry/Londonderry, and regional
towns/cities. In addition NIHE has identified other areas "at
risk" and has targeted investment programmes to improve living
conditions.
5.9 While the Department for Social Development's
Fuel Poverty Strategy is at draft stage a range of policies and
additional investment have been put into place in recognition
of its importance. Fuel switching (from coal to oil/gas) was introduced
in 2000; a strategy for switching NIHE stock was simultaneously
introduced and in the private sector the Warm Homes scheme targets
fuel switching for elderly households.
5.10 Accessibility for the elderly and disabled
has emerged in recent years as a significant issue in both sectors.
Investment levels through public sector adaptation works and Disabled
Facilities Grants have risen to match the need.
5.11 NIHE investment programmes in the quality
of housing and neighbourhoods have strong linkages to other objectives
set out in the Programme for Government. A summary of the linked
programmes are set out in Annex 1.
5.12 In brief—
— Investment patterns to effect better
quality housing and neighbour-hoods continue to change to reflect
changes in conditions and priorities.
— Strategic studies into the management/ownership
options and maintenance investment for social housing are at draft
stage.
— Rural housing, houses in multiple
occupation, urban renewal, neighbourhood renewal, disabled adaptations
and fuel poverty have been set as priorities with strategies and
investment programmes in place.
— Programmes have strong linkages to
other objectives in the Programme for Government.
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