For almost a year, 30 brand new social homes have stood empty in Dungannon amid an escalating housing crisis. No one can move in until they are connected to sewage services — but Northern Ireland’s water utility has no money to build them.
Worsening supply problems, largely caused by the sewage shortages, are driving up house prices in the region at the fastest rate in the UK — home construction in Northern Ireland last year sank to a 65-year low.
The wastewater crisis is a stark illustration of Stormont’s problems in funding upgrades of the region’s crumbling public services. NI Water said it had struggled to fund necessary wastewater infrastructure ever since it was set up in 2007.
“The need for substantial investment in wastewater infrastructure has been evident for a long time,” said John McLean, chief executive of Radius Housing, which developed the homes in Dungannon, County Tyrone, that were finished in February.
“While previously we had some uncertainty about what could or could not be built, we now have the certainty that almost nothing can be built,” McLean said.
Like the Dungannon development, 19,000 homes in 23 towns across Northern Ireland are on hold because they cannot be connected to wastewater services. Meanwhile, more than 47,000 people are on housing waiting lists and at least 55,000 are homeless.
Under pressure to balance its books, Stormont is not turning on the funding taps, and has already slashed NI Water’s capital budget for 2024-25 to £321mn from a previously established £590mn.
Ratcheting up the pressure on the government, the utility also faces the prospect of its first strike in a decade with “water workers on the picket lines in the next two weeks” unless they receive a pay rise and lump sum given to other civil service worker, according to GMB union senior organiser Alan Perry.
Nearly 5,400 homes were built in Northern Ireland last year — well below the region’s “notional target of around about 10,000 homes”, said Mark Spence, chief executive of the Construction Employers Federation, an industry body.
“This year it’ll certainly be under 5,000 and closer to 4,000,” he added.
A recent CEF survey found 8,450 homes — representing about £1bn of investment — were being held up by wastewater capacity problems.
These include 421 social rental homes due to be built by Apex Housing Association in the north-western city of Londonderry, also known as Derry, on a 2,500 home development.
NI Water delayed construction of two pumping stations to serve the estate three times before finally saying in July it had no timeframe to deliver them.
Apex began site preparation in March 2023, but said “unless there is immediate progress made by NI Water, the construction of this much-needed development may need to be stalled”. More than 6,000 people are on waiting lists for social homes in the area.
Spence said the water crisis was also spilling over into business decisions. “We’ve heard of a number of instances of factories who were going to invest here and are going elsewhere — it’s a crying shame,” he noted.
He said one company, which had planned to build a £25mn factory in the city of Newry, had decided to relocate to Dublin instead, even though the Republic has serious housing and infrastructure problems of its own.
Padraig Venney, Northern Ireland director at the National House Building Council, the UK’s largest provider of warranties and insurance for new-build homes, said: “2007 was the last time more than 10,000 new homes were delivered in Northern Ireland in a single year.” He called the situation with wastewater connections “abysmal”.
Stormont relies on the UK government for most of its money and says it has been funded well below its real level of need for years, crimping investment in infrastructure and services. It must stick to its budget this year or face repaying a previous £559mn loan from the UK Treasury.
NI Water has just received an extra £31mn in funding last month in a mini-budget. But finance director Ronan Larkin told a Stormont committee this month: “We find ourselves with a gap of £23mn between what we need to run the service and what is available to run the service.”
Despite the challenges, infrastructure minister John O’Dowd has ruled out introducing domestic water charges to bring in more revenue.
With housing supply squeezed, Marine MacDermott, property manager at estate agent Anthony Jamieson on the Ormeau Road in middle-class area of South Belfast, said prices were rising but “we’re still not at [where we were in the height of the market in 2007”.
Property prices rose 10.2 per cent on an annual basis in October, to an average £204,242, according to the Halifax house price index. While still below the 2007 peak, they have been increasing since 2013, matched by a slide in supply.
MacDermott nevertheless saw plenty of demand, including from cash buyers, people with large deposits and parents helping their children. “A three-bed semi [detached house] around here costs £250,000 — and that’s at the lower end,” she said.
Michael McCord, a housing expert at Ulster University, said the “complete mismatch between market supply and demand” would keep prices at current levels “certainly in the short term”.
Or as MacDermott put it: “There isn’t enough stock, full stop.”
Data visualisation by Janina Conboye
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