NIHE: the housing giant that is transforming into a mutual
One of the UK’s largest landlords, the NIHE, has revealed plans to become a mutual. Alice Grahame finds out what it will mean
Change is coming to Northern Ireland’s housing scene. After decades of proposals, the future of the Northern Ireland Housing Executive (NIHE) has become clear.
Earlier this month, the government announced that the NIHE – which is the sector’s largest landlord with 85,000 homes and numerous other housing functions – is to be split in two. The landlord part will be hived off and reclassified as a mutual. This will remove it from the constraints of the public purse, allowing it to borrow, as housing associations can, enabling it to invest in its stock and build new homes.
It is not yet clear what the future holds for the other part of the NIHE, which administers housing benefit, provides accommodation for homeless people and publishes housing investment plans for the councils.
But for the landlord part of the NIHE, this is a big change. It immediately welcomed the move. “Being able to build new homes again gives the Housing Executive the opportunity to tackle growing housing need and address homelessness across Northern Ireland,” says its chair, Professor Peter Roberts in a statement.
So far, so good. But what are the next steps for the NIHE? What does this move mean for the sector as a whole? And what are the potential stumbling blocks?
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Details of how the proposals will be implemented are sparse. Justin Cartwright, national director for Northern Ireland at the Chartered Institute of Housing, has an insider’s perspective, having worked closely with the government there before. “We don’t know yet what the governance structure will look like,” he cautions. But once it happens, it will unlock much-needed change for tenants in the organisation’s homes.
“[The NIHE] will be able to repair homes, regenerate its estates and start building again, which it hasn’t done since 2002, with housing associations currently being the sole providers of new build social housing in Northern Ireland. In the long term it will mean more tenants will live in decent homes.”
“The fact is there are more homeless people in Northern Ireland today than at the height of the Troubles.”
A joint government and NIHE survey in 2014 found that £7.1bn is needed over 30 years to bring homes up to a decent standard in Northern Ireland. Successive ministers have kept rents low, bringing in less income than needed. The Right to Buy has raised limited revenue since the housing market crash of 2008, while removing 400 to 1,000 social homes from the housing stock every year. And as the NIHE is a public corporation, it cannot borrow to invest in stock either.
Mr Cartwright continues: “In the decade since reform was first discussed, the problems with stock have only worsened. There is a sense of urgency now and the ‘do nothing’ approach is not an option.”
Paddy Gray, a housing professor at Ulster University, agrees: “This is not new. It has been debated for a very long time. But it is important that it has now been publicly announced. The fact is there are more homeless people in Northern Ireland today than at the height of the Troubles.”
Social housing in Northern Ireland is not like the rest of the UK. There has been no council housing since 1971, when that role was removed from councils and transferred to the NIHE at the beginning of the Troubles.
The NIHE was set up as a result of the Cameron Commission that had investigated allegations of sectarianism housing provision and management and, in particular, the allocations system. At one stage it had nearly 200,000 homes. That number reduced mainly through the Right to Buy and large-scale demolition, but the organisation still owns and manages around 85,000 homes.
A mural in Belfast (picture: Getty)
So in a sense, NIHE is a unique case. But it is not the first time a large landlord has become a mutual in the UK. Rochdale Boroughwide Housing (RBH) and Merthyr Valleys Homes became mutual organisations, in 2013 and 2016 respectively. Both transferred their housing stock to a mutual following ballots of tenants.
RBH was created after Rochdale Council hived off its stock to be run by an ALMO. It then became the UK’s first tenant and employee co-owned mutual housing society and has more than 12,000 homes.
Gareth Swarbrick, chief executive of RBH, has had discussions with his Northern Irish counterparts and believes it is positive the NIHE has chosen this direction. He explains: “Having the capacity and freedom to build new social housing is very important, but becoming a mutual is about much more. For us, the transfer came after two years of discussions and involved a new way of working with tenants and employees.
“Transfer to a mutual is not a panacea for all housing ills, but what it can do is provide a strong structure to make sure that tenants have a voice, and that together we can respond to challenges from a stronger position.”
David Williams, a partner at Campbell Tickell, was involved in discussions with the Northern Irish government two years ago to explore options for the NIHE. He says: “What they are proposing is a variation of stock transfer that has been happening in the UK for several years, where several million homes have been transferred from public bodies to housing associations. If you apply the UK model, in order to create the new body there will need to be a ballot of tenants.
“That is what happened in Rochdale and Merthyr. You have to persuade a majority of the 85,000 tenants that they want to change landlords. In Northern Ireland, the [NIHE] is a trusted and respected body. It is seen as a solution to a problem that people don’t want to return to.”
Still, changing the organisational structure and allowing borrowing is far from the end of the story, Mr Williams warns, and there will be a tension between protecting current tenants from future rent increases and allowing the new NIHE to raise funds for repairs and development. “At the moment rents are very low. That’s great for people that live there but not so good for the organisation trying to borrow money,” he points out. “If the communities minister is committed to keeping rent low this will impact on the amount of finance the organisation is able to borrow.”
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