Mark Graham, Chief Executive at Co-Ownership, shares his thoughts about the housing market in Northern Ireland, housing policy, challenges facing buyers and how the system works well for many, but not well enough for all.

Someone recently asked me what I thought of the housing market in Northern Ireland, expecting that, as I work in housing, I should have an opinion or two. “It probably depends who you ask or how you look at it,” I remarked; probably not the pithy or insightful answer they were anticipating, but the answer really does depend on who you ask.

If you work in social housing your perspective is driven by rising levels of homelessness, the dire impact of welfare reform and the challenges of building more social homes. If you speak to someone working in the private market – house builders, mortgage providers, estate agents – you will get a much more positive message about affordable house prices, increasing numbers of first-time buyers and cheap mortgages. But there is also a recognition that we need more homes, that the planning system and underinvestment in infrastructure are becoming real barriers to building new homes. If you speak to a few of the tens of thousands of private landlords in Northern Ireland, generally, people talk about high demand, rising rents that cover their mortgage and enough capital growth to provide a pension. In other words, they think about it as an investment.

To get an overall picture of the housing market a better way of looking at it is from the perspective of people looking for their first home. This perspective allows us to see the housing system as it is experienced by its users – a system falling short of the needs and aspirations for many young people.

Young people today are little different from earlier generations in their homeownership aspirations. They may be settling down a little later in life, in part, I think, because they want to, but also because the precarious nature of employment these days means they need to wait longer before they are financially ready. They want a home that is affordable, one that meets their needs, and somewhere they can stay as long as they want. They also want somewhere they can put down roots in a community, somewhere that is safe and vibrant, where they can raise a family.

If you are fortunate enough to have access to the “bank of mum and dad”, that is you have enough money for a deposit, then you are very well placed to get the home of your dreams. House prices here are very affordable compared with GB or the Republic of Ireland, mortgage providers are offering very good five-year fixed rates and they have loosened some of their criteria, so mortgages are easier to get. We are also seeing a rise in the number of new-build properties targeted at first-time buyers.

But the typical first-time buyer here still needs a 10 per cent deposit, or £12,000, for the average first-time buyer property valued at £120,000. If you are on a low wage, or even an average wage, this could take years to save. If you are living in the private rented sector and likely paying out around £600 per month then saving for a deposit is going to be even more challenging. It is also unclear whether the current benign market will be sustained in the long-term. Even modest house price growth of recent years, currently running at 5.5 per cent per annum, means that house prices are gradually becoming less affordable for first-time buyers as incomes continue to stagnate.

If you cannot find a deposit, or your income means you cannot afford a mortgage, your choices are very limited. Social housing does provide high-quality, affordable homes with a secure tenancy, but if you’re employed and “adequately” housed, either in the private rented sector or with your parents, then your chances of getting a home in social housing are slim. The lack of social homes means that in many places even those who are in severe housing stress or homeless may have to wait years before a permanent home becomes available. Housing Associations do a great job in delivering new social homes here and proportionally we outperform GB in the number of new social homes we deliver each year. But given the limited funds from government and the difficulty of acquiring land in the right places even delivering the current aspiration of 2,000 new social homes per annum is difficult and at best will only address the most urgent cases of housing stress and homelessness.

It is too simple to say the private rented sector is a last resort, picking up the need that the social and owner-occupied sectors cannot meet. Many people want to live in the private rented sector because the flexibility meets their current needs and many people have good landlords who maintain high-quality homes and provide a responsive landlord service. But the research into people’s housing aspirations is clear. The current model of provision through the private rented sector does not provide an affordable, secure and consistently high-quality option. Few people want to be in the private rented sector in the long-term. In part this is cultural. We are wedded to the idea of homeownership as an investment and seeing rent as “money down the drain”. We need a better product, one that addresses such reservations. England and Scotland have been updating their tenancy laws with England consulting on moving from six-month Assured Shorthold Tenancies to three-year tenancies. Scotland moved to open-ended tenancies in 2017. Both countries are also strengthening the regulation of the private rented sector.

The Civil Service continues to valiantly work on developing new housing policy but would admit that this is difficult without political direction and will be impossible to implement without a new democratic mandate. There is broad political consensus here that we need more social housing, a better private rented sector product and better support for private developers to build homes.

To end on a more upbeat note, as part of their local development plans, local government are trying to address some of these issues. Belfast was the first council to publish their proposals in a Draft Plan Strategy and they included a draft policy that all housing developments over 0.1 hectares and/or containing five or more dwellings units should provide 20 per cent affordable housing; affordable housing being a mixture of social housing and intermediate housing, such as shared ownership provided by Co-Ownership. Other councils are expected to propose similar policies and it is great to see local government showing leadership to deliver the homes we need.

The housing market here works very well for many people, however there is a growing group of people for whom the housing market does not work; the homeless, people in housing stress, those that feel trapped living with their parents into adulthood, tenants living in an expensive and insecure private rented property. In Northern Ireland, we need new housing policy, more investment in housing and a housing system that works for everyone.