Northern Ireland landlords warn rents will rise due to soaring electricity connection cost

Seamus Leheny, chief executive of NIFHA, said the “significant increase” by NIE Networks came after funding cuts this year to the Social Housing Development Programme, difficulties with NI Water and increasing inflationary costs in building new homes created “the perfect storm”.

He said: “This 123% increase from NIE now means it will cost housing associations more to deliver vital social and affordable homes.

“The increase cannot be absorbed by our members, resulting in higher repayment costs per home that impacts rents, which will put additional pressure on some of the most vulnerable people in our society.”

Mr Leheny added: “The social housing waiting list is now over 48,000 applicants, with over 36,000 of those applicants in acute housing stress. Therefore, we need to be building more social and affordable housing.”

Mark Spence, chief executive of the CEF, said: “For some 15 years, Northern Ireland has, on an annual basis, built only around 50%-60% of its new build housing need. That has resulted in a dearth of new supply of housing of all types, further exacerbating our social housing waiting list and the difficulties many have in being able to move from home rental to homeownership.

“Against a backdrop of a 60-year low of housing completions in 2023, it is unquestionable that we are therefore in the middle of a housing crisis in Northern Ireland.

“Given the extreme challenges that many homebuilders are facing in the context of the decades of underfunding of NI Water leading to the inability to connect many thousands of new homes to the network, any additional cost implication to building new homes, given the unprecedented inflation of recent years, must be thought through very carefully.

“We do not believe that this 123% increase has been given the full and proper consideration that it needs in the context that home builders currently face, and we would urge the Utility Regulator and NIE Networks to urgently rethink the implications of what they are enforcing.”

NIE Networks, which owns the network of lines, poles and substations that takes electricity from power stations to homes, said the price increase was necessary because of construction cost inflation.

A spokesperson for NIE Networks said: “This charge applies only to housing developments of 12 properties or more and will not impact single-house connections.

“In Northern Ireland, there are a number of providers that can connect to the electricity network, enabling developers to have a choice of provider.”

A spokesperson for the Utility Regulator said: “In 2022, NIE Networks provided evidence to the Utility Regulator and the CEF to show that the costs of these works had increased beyond the level of inflation.

“As a consequence, there was a significant shortfall between the actual costs incurred by NIE Networks and the standard connection charge. This meant that the additional cost of the site works were being paid for by all electricity consumers.”

The spokesperson said NIE Networks had submitted an updated statement of charges, which “includes a phased approach to increasing the charge to a fair and cost-reflective level, and we have approved this”.