With Britain’s 2025 Budget mapping out financial plans for housing, it calls into question whether this financial injection will actually create an increase in housing production in the following year. As election time swiftly approaches, questions regarding this matter will inevitably come flooding in for governmental representatives.
The whopping €6 billion allocated for housing in this year’s budget, which is being hailed as groundbreaking by numerous politicians, fails to present any significant new policies. However, the real novelty lies in the €4.5 billion provided in capital funds to the Housing Department, an increase from the previous year’s €3.9 billion. This funding will largely be utilised to support the government’s strategy for housing.
Despite these seemingly promising figures, the signs don’t inspire optimism when it comes to output. In fact, the 2024 output seems to have reached a standstill, compared to the preceding year. Kieran McQuinn, the ESRI associate researcher, expressed his disappointment at a recent post-budget briefing, highlighting that the hoped-for increase from the 33,000-34,000 completed properties in 2023 to around 40,000 in 2024 did not materialised. Rather, he predicts a similar output to 2023, a disappointing reality indeed.
This is a stark contrast to the ambitious figures of 40,000 new properties that had been pledged by Taoiseach Simon Harris and his coalition associates earlier that year.
The efficacy of this year’s budget in generating an increase in new homes in the forthcoming year is still uncertain, given other contributing factors. In particular, the construction sector is suffocating under a labour shortage post-Covid and the financing cost for private-sector remains high after a prolonged period of zealous hikes in bank interest rates. However, McQuinn reiterates the importance of governmental contributions to housing financing to keep output growing in the medium-term.
Despite these challenges, there is a glimmer of hope that the output may surpass 35,000 in 2025. Regardless of qualms regarding data quality, figures surrounding the start of housing projects this year have been optimistic, indicating a buoyant flow for the next year. The surplus funding poured into housing in the budget will undoubtedly sustain this development.
“While we may continue to see weak production compared to consumer needs and the ambitious, ever-shifting goals set by the Government, there is a silver lining for Darragh O’Brien, the Minister for Housing, and his team. The likelihood is that it may be passed on to a different person to handle in the subsequent year.”