In this year’s UK Housing Review, Eddie Lewis, writing about the housing market in the Republic of Ireland, calls it a disaster movie. Apart from banking, housing was perhaps the sector most affected by the rise and fall of the Celtic Tiger: the boom years when Ireland appeared to slough off its economic woes, growth rivalled that of the most successful Asian countries, and production of private housing went through the roof. Lewis suggests that long-term demand for housing In Ireland requires around 25,000 new homes to be built each year, yet in 2007 output rose close to 100,000. Within six years, it was to fall to only one tenth of this number, as the market collapsed and newly built estates were left empty and unsold. Even now, close to one-fifth of homeowner mortgages are in arrears and in the buy to let sector the proportion is over a quarter. The disaster movie has ended but the damage is still being cleared up.

Not surprisingly, social housing has also been affected by the drastic change in economic fortunes, but not so drastically as in the private sector. The chart shows the fall in output of new social housing units in Ireland since its peak in 2007 and 2008, but more importantly it flags a significant shift in programmes. Local authority new build has been drastically affected, with a €1.4 billion investment programme in 2008 declining rapidly to one of only €55 million in 2013. As the chart shows, output of new social units has all but stopped as a consequence. Priorities have shifted, in part to respond to the surplus of housing in the private sector. Access or leasing schemes, known as the Rental Accommodation Scheme (RAS) and Social Housing Leasing Initiative (SHLI), have more than tripled in size since 2008. RAS allows housing authorities to make arrangements with private landlords to house social tenants, and currently accounts for 21,500 tenancies. SHIL is a smaller scheme in which private properties are leased for letting to social tenants. In addition, ‘Part V’ agreements, also affected by the current squeeze, were intended to secure social provision in private developments (similar to section 106 agreements in England & Wales or section 75 in Scotland). Notably, investment in the voluntary sector has displaced local authority investment as the main source of the remaining social new build output. While social sector output has moved back to more ‘normal’ levels, therefore, the pattern of investment is now drastically different from what it was when the boom years began.

Unlike the UK, Ireland runs regular studies of national housing needs, normally on a three-yearly cycle. There has been a gradual rise in the number of households in need of housing support both before and during the boom years. This seemed to have stabilised at around 45,000 in the first few years of the last decade but from about 2005 the numbers climbed sharply and now stand at around 90,000 households. Ireland has traditionally been a country that is more reliant on homeownership than most other advanced economies. At its peak it reached 80 per cent of households, but has now fallen back to 70 per cent. As Eddie Lewis suggests, housing policy has of necessity been reconfigured, with support for new entrants to homeownership being cut and more emphasis now being placed on the rented sectors, both private and social. As he also points out, there is a need to develop a fairer and more sustainable model of social housing.

Ireland, then, is currently dealing with some similar issues to those that feed the housing policy debate in the UK, albeit from a very different starting point. As Lewis concludes: the disaster movie has ended, the world has been laid waste “but most of the population has survived to emerge, somewhat chastened, into a new world. For what happens next you will have to await the sequel.”

Original post and comments: Chartered Institute of Housing