Northern Ireland cuts social housing delivery grant rates for housing associations

The Northern Ireland Executive has reduced the grant it provides to housing associations to build new social homes from 54% of the total cost to 46%.

According to the government, the cut takes account of construction costs, inflation, rent levels and interest rates and is “in the interest of securing the maximum possible number of new social homes from the department’s budget.”

It has also announced reviews of the new grant and the design standards to which new social homes are built.

Gordon Lyons, communities minister, 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.”

However, the Northern Ireland Federation of Housing Associations (NIFHA) warned that the reform could undermine the delivery of new social housing.

A spokesperson for the group said: “These reductions raise real concerns about the future viability of many projects currently in development or close to commencement, particularly in areas of highest housing need.

“These changes have been developed without detailed consultation with the housing association sector, and as a result, their full impact has not been properly assessed.

”With the new grant rates due to take effect from 1 December, there is a real risk that key projects could be delayed or cancelled, especially in places like Belfast where demand is greatest. Housing associations will now have to re-evaluate if and how many projects can progress in the short term.”

The new grant level will take effect from 1 December 2025 until the end of the 2026/27 financial year.

Lyons also described 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.

The Northern Ireland Executive is targeting 5,850 social housing starts within the current mandate, which ends in 2027.