Last week The Centre for Progressive Policy (CPP) published its report ‘The cost of living crisis across the devolved nations: How rising costs are hitting different places across Scotland, Wales and Northern Ireland.’
Housing Rights welcome this report which highlights the scale of the crisis in Northern Ireland, casting a much-needed light on the struggles of people coping with the financial pressures of what is a generational cost of living crisis.
Housing Rights welcome this report which highlights the scale of the crisis in Northern Ireland, casting a much-needed light on the struggles of people coping with the financial pressures of what is a generational cost of living crisis.
The report focuses on three key aspects to illustrate the impact of the cost of living crisis is having on people in each of the devolved nations:
- fuel poverty;
- food insecurity; and
- housing costs.
Housing Rights will specifically focus on the housing related issues.
The cost of a lack of government
Housing Rights prefaces this article with a call for a Northern Ireland Executive to be established without delay. The CPP Report details many negative impacts the cost of living crisis has had on people in Northern Ireland, specifically highlighting Northern Ireland as the only UK nation to have lacked a proper policy response to the cost of living crisis. The negative impact this has had on society in Northern Ireland is manifold. The inability to build resilience within Northern Ireland’s economy and its communities, to efficiently gather data and to make agile policy decisions to target those most in need has directly adversely impacted upon the most vulnerable.
It’s clear the issues highlighted in this report could have been better foreseen and prepared for had an Executive been in place, offering opportunities to build resilience and soften the blow of the crisis. It’s also clear that a regional government in Northern Ireland would be best placed to provide responsive and targeted policy initiatives to address the cost of living crisis and help protect people from the worst impacts of the crisis.
A need for robust data
Housing Rights is disappointed that Northern Ireland has proven to be more difficult to meticulously examine than Scotland or Wales. The lack of data in comparison with the other devolved nations is stark. This makes it hard for policy makers to effectively identify and target those most in need. With this in mind, Housing Rights specifically welcome Recommendation 2 & 3 of the CPP Report and calls on any future NI Executive to adopt these as actions at the earliest possible juncture. It is vitally important that policy decisions are made using a clear and robust evidence base to ensure that resources are targeted to best meet the needs of our most vulnerable people.
Northern Ireland’s Private Rental Market and impact on private tenants
As Housing Rights has continually highlighted in recent months, the Report cites the overheating of Northern Ireland’s Private Rental Market as a major contributor to the cost of living crisis. Between March 2022 – March 2023, rent prices in Northern Ireland rose by 10%. By comparison, Scotland saw the second highest rise of the four devolved nations with a rise of 5.1%. Of all the local authorities in Northern Ireland, only Derry City and Strabane, and Mid Ulster saw rental prices increase by less than 5%.
It is Housing Rights’ view that this trend is unlikely to reverse in the near future. The Private Rental Sector (PRS) in Northern Ireland is shrinking as a percentage of market share, down from 14% in 2020-21 to 13% in 2021-22. This reduction in supply may be in part influenced by rising interest rates, with some landlords deciding to sell. House prices in Northern Ireland have not seen a drop comparable to England, Scotland and Wales, and most landlords in Northern Ireland have small portfolios of only one or two properties. If landlords have mortgages on these properties, the interest rate rises may have impacted on their income. Amid this, demand has never been stronger according to rental agents, outstripping supply 10/1. There has also been evidence of rent bidding. These factors all contribute to continued price rises, further squeezing already struggling private renters in this cost of living crisis.
To add some insight into these struggles, in February 2023, Renter’s Voice, a project supported by Housing Rights for people renting from a private landlord or a letting agent, conducted a survey of private tenants in Northern Ireland regarding the impact of the cost of living crisis on their rental situation.
Results from the 107 survey respondents showed that:
- 47% reported spending 40% or more of their income on rent;
- 54% reported they cannot currently afford to cover all of their household expenses; and
- Of those who could afford to cover their household expenses, 74% said they prioritised paying rent. This was followed by electricity at 41% and heating at 36%. This is particularly pertinent as fuel poverty is also highlighted in the CPP report as a significant contributor to the cost of living crisis.
Perhaps the most stark finding from Renters Voice survey, is that 44% of respondents believe that if the current cost of living crisis continues, renting in the current market will become unsustainable. It is clear that private renters are being squeezed to a perhaps unprecedented extent and that bold policy decisions need to be taken to address this.
Impact on mortgage owners
The CPP report acknowledges a lack of comprehensive local data on mortgage vulnerability as a major hurdle to drawing detailed findings on the impact of the cost of living crisis on mortgage holders in Northern Ireland.
This is a frustration shared by Housing Rights. We have commissioned research into levels of mortgage vulnerability in Northern Ireland. We will share the findings in due course, as well as policy recommendations arising from the research.