Oral statement NI Assembly – Communities Minister Gordon Lyons – Social Housing Development

Date published: 18 November 2025

I want to begin by recognising the efforts of our key partners in delivering new social homes via the new build programme in times of constraint and uncertainty. The solid partnership arrangements between my Department, the Northern Ireland Housing Executive and Housing Associations ensure there is a steady and increasing supply of new social homes for people on the waiting list. I am grateful for their steadfast commitment to delivering the programme.

But both the Department and the sector face many challenges in relation to the budget required to support this work. Despite my efforts to secure an adequate budget allocation to meet the need for new social homes and my intention to continue to maximise delivery, I, along with the sector, have not received sufficient capital allocations in any budget rounds.

Every party in this chamber talks of their passion for housing and support for more social homes. At the Executive, we agreed a Housing Supply Strategy with clear targets for house building. In the Programme for Government, one of the few targets agreed was on social housing yet still Mr Speaker, I continue to receive insufficient capital funding. I cannot be the only one to make this case.

I have taken the decision to review the funding allocation to Housing Associations, to ensure we get the most out of every pound we spend. This is an opportunity to look at the programme afresh and identify opportunities to be creative. We need to do more with less, collectively working to address the barriers to finance and social housing supply.

I met with the Northern Ireland Federation of Housing Associations, Housing Association representatives and the NIHE to give them advance notice of the changes that I announced in late October. At that meeting I advised the sector of the new indicative costs and grant rates for new build social homes, which will be effective from 1^st December 2025 through to the end of March 2027.

New social homes are funded through a combination of grant from my Department and borrowing by the developing Housing Association, creating a match-funding style arrangement which gives value for the public money invested.

Following careful consideration, I have decided to increase the benchmark costs, (the assumed cost of building a new social home) by 13.7%, from an average of £181,164 to an average of £206,100. This reflects increased costs to the sector due to inflationary increases; new Building Regulations; and increases in NIE Connection Charges, among other things. This is an acknowledgement that relevant costs have increased since the benchmark costs and grant rates were last changed in 2023.

However, while construction costs have increased, rents have also increased.

As a result, and 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 from an average of 54.2% to an average of 46.52%.

To give certainty to the sector, these new benchmark costs and grant rates will be kept in place until the end of the 2026/27 financial year unless there are very exceptional circumstances requiring a change to the rates.

I have set out to the Housing Association sector my expectation that they, like the public sector, must deliver within challenging financial circumstances and strive for efficiencies. It will be for each individual housing association to decide themselves how much private finance they can borrow and how much risk they take on.

The impact of this will be to make my budget allocation stretch further and enable us to build more homes with the funding available. I am asking Housing Associations to do more - driving innovation, finding efficiencies and increasing private financing to make up this small shortfall.

Let me be clear. I am not cutting funding to the programme. I am making changes to ensure that the £177.5M allocated from my budget that will be spent this year on new social homes, and the funds spent next year, go as far as possible. Every new home matters.

I have listened to the Housing Association sector and that is why I have also announced reviews, called for by the Associations themselves, into how we subsidise new build social housing, and the standards to which it is built. Our ambition is that at least some of the value-increasing measures that these reviews should propose may be introduced to the Development Programme in the next financial year – and that, in their entirety, these reviews are completed by September 2026.

Achieving the Programme for Government target of 5,850 social housing starts within this mandate will be extremely challenging given the constrained budgets.  Changes must be made; we must achieve more, with less.  I am fully committed to delivering on the PfG target and realising the longer-term ambition of the Housing Supply Strategy to deliver at least 100,000 homes of which one third will be social. Achieving these will require innovation and creativity but at the outset, will ultimately require adequate funding allocations.

I chaired a Housing Roundtable meeting earlier this year, which brought together key stakeholders to share knowledge on how to increase social housing delivery in the current challenging environment. My officials are taking forward work with NIHE and the wider sector on proposals aimed at increasing or improving the delivery of the new build programme in future years.

As previously advised, I am bringing a proposal to the Executive to make better use of public land in a way that can act in lieu of grant and support the delivery of more affordable homes.

We must maximise supply with the resources we have. The ‘whole system’ issues such as wastewater capacity, planning and land availability must be addressed, to unlock the homes we need.

My Housing Supply Strategy provides the framework for how we can do this, and the Executive has collectively committed to it. The quality of actions to implement it will determine our success in delivering the Strategy vision.

I require an action plan that demonstrates real intent to removing barriers; so, as it moves closer to being finalised, I have written to my Ministerial colleagues to challenge them to propose actions that will genuinely deliver progress in meeting the significant challenge we face.

I have also written to the other Ministers of this Executive to seek their support in ensuring that sufficient budget allocation is made for the Social Housing Development Programme to enable delivery against our commitments and I unashamedly make that case again today.

In closing Mr Speaker, I can assure you that I am committed to delivering value for money in the social housing development programme, and to doing everything in my power to ensure that sufficient budget allocation is made to enable delivery of our PfG target.

However the House should take note; I’m not prepared to just keep doing things as we have always done them. I will always seek to be innovative and to try new things to maximise delivery.

That’s what I’ve been doing since I took up post. Using more FTC for homes with cheaper rents, using NIHE reserves to reduce temporary accommodation costs, doing away with intimidation points to create a level playing field and finding new ways to subsidise public housing.

These are changes that we need and changes that I will continue to bring in so we can deliver more for the people of Northern Ireland.

I have played my part.

Now it is time for this House and my Executive colleagues to rise to the challenge and take the decisive action needed to ensure our shared ambition truly meets the needs of the people of Northern Ireland.

I commend this statement to the House.