Budgeting to increase housing supply
Finance Minister John O’Dowd MLA’s draft Budget for 2026-2029/30 proposes capital investment of £441.7 million for new social homes and £433.7 million for water infrastructure to help unlock housing supply.
Social housing is allocated £18.7 million in earmarked funding comprising £10 million in 2028/29 and £8.7 million in 2029/30. This is supplemented by borrowing under the Reinvestment and Reform Initiative (RRI). The RRI is a borrowing facility set up in 2002 to support the Executive’s infrastructure investment programmes.
Social housing is allocated £423 million between 2026/27 and 2029/30 under RRI borrowing with £107 million provided for each financial year of 2026/27, 2027/28, and 2029/30. A total of £102 million is allocated for 2028/29.
Northern Ireland Water is also provided with earmarked funding of £18.7 million with £10 million allocated for 2028/29 and £8.7 million for 2029/30. The organisation is allocated £405 million for 2026/27 to 2029/30 under RRI. This comprises £105 million for each financial year of 2026/27, 2027/28, and 2029/30, with £100 million allocated in 2028/29.
DfC has reported sustained financial strain with its 2024/25 budget consultation identifying a resource departmental expenditure limits (DEL) shortfall of around £115.8 million and a capital DEL shortfall of around £167.3 million against assessed need.
These pressures are driven by a rising demand for social housing, homelessness prevention and temporary accommodation, regeneration programmes, and administrative costs arising from the delivery of social security benefits.
O’Dowd proposes that the Department for Communities (DfC) be provided with £2.8 billion in DEL allocations for day-to-day spending. This comprises £922 million for 2026/27, £944.3 million for 2027/28, and £960.3 million for 2028/29.
Under the proposed departmental budget outcome for 2026-30, DfC would be provided with capital DEL of £1.3 billion. This includes £294.9 million for 2026/27, £319.2 million for 2027/28, £321.7 million for 2028/29, and £404.1 million for 2029/2030.
Communities Minister Gordon Lyons MLA told the News Letter that the draft Budget is “deeply flawed” and in need of “significant changes”.
“I want to hit a target during this mandate of 5,850 homes. I am probably going to be around 500 short on that. But it gets worse as the years go on, because the cumulative effect of that shortfall will mean that we will be over 2,000 units short of where we need to be,” said Minister Lyons.
“This is so important, because every home that we do not build here puts more pressure on the private rented sector and puts up rents; that is where people are really struggling right now. So this is critical. I have done everything that I can to make the money go as far as it can.”
