Written evidence submitted by Build Homes Northern Ireland, relating to Economic growth in Northern Ireland new and emerging sectors

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Build Homes NI

Build Homes NI represents some of the region’s largest house builders who have collectively invested hundreds of millions of pounds in construction activity across Northern Ireland in recent years.

Despite this, further ambitions to build new homes are being increasingly frustrated by problems associated with chronic underinvestment in NI’s wastewater infrastructure.

Although the focus of the inquiry is new and emerging sectors, the difficulties encountered by the housing sector are impacting economic growth generally. A lack of wastewater capacity means that any business which requires a new water connection may struggle to receive planning permission.

Background

Northern Ireland’s wastewater infrastructure is in crisis.

Decades of political inaction and wilful underfunding of NI Water have severely constrained new building capacity. There are over 100 areas where wastewater infrastructure is operating at or above capacity. This has halted development in 23 towns and villages across the region.

The failings of NI’s wastewater infrastructure and the inadequacies of NI Water’s funding model have been well documented.

Build Homes NI refers the Committee to:

Lost economic activity in the housing sector alone is substantial.

The Joint Position Paper commissioned by the NI Chamber of Commerce, NI Federation of Housing Associations and the Construction Employers Federation) identified a £2bn deficit in funding for NI Water and concluded:

“If no solution is forthcoming and housing delivery falters and the impact extends into the next Price Control period (2028-33) a 7 percent reduction is anticipated, resulting in the loss of 2,740 jobs in the construction sector alone, and a colossal £4.4 billion investment forgone, equivalent to the non-delivery of approximately 19,000 homes”.

The Chair of NI Fiscal Council, Sir Robert Chot, stated that NI Water’s “current funding model is not fit for purpose”.

Implication beyond the Housing Sector

Economy

Such is the poor state of NI’s wastewater infrastructure, major new planning applications can not be progressed in large parts of the region. This is not conducive to the Department for the Economy’s objective to deliver economic regional balance.

In 2024 the Construction Employers Federation estimated that 55 non-housing commercial, manufacturing and hospitality schemes had already been cancelled due to wastewater constraints.

In a recent interview with the Financial Times (September 2025), the CEO of Invest NI stated that the lack of wastewater infrastructure was undermining its ability to promote dual market access.

Kieran Donoghue said dual market access is primarily a manufacturing opportunity but “manufacturers need water in water out”.

He added that there is no “fast solution” to the issue and INI is therefore focusing on “companies and investments that are relatively infrastructure light in the services space”.

Environmental Reputation

The poor state of wastewater is also contributing to severe pollution and degradation of Northern Ireland’s waterways. Eel fishing was suspended in Lough Neagh this summer and the shellfish industry in Belfast Lough is under severe pressure. While not large sectors in themselves, agri-food is a major employer in Northern Ireland and trades on the region’s ‘green and clean’ reputation.

This is inconsistent with a wastewater system that spills 20 million tonnes of untreated wastewater and sewage (including human waste and chemical discharges from factories) into Northern Ireland waterways annually.

NI Water has warned:

“The issue of constrained funding becomes even more acute in price control 27 (PC27) to the point that it could start to impact on proposed work to enhance our clean water assets, and there could be no enhancement at all of our wastewater assets. That is a developing and potentially more severe issue. In addition, we will not be able to address the transition to a net zero position or even plan for the new sludge disposal facilities to treat the sludge that comes out of our wastewater assets.

That puts Northern Ireland perilously close to having a permanent wastewater issue; potentially no improvement in water course standards, where wastewater is the primary pollutant; and limited ability to meet new environmental commitments. That could end our ability to connect most new homes and enterprises, and, following the recent publication of the Programme for Government, it could impact on the ability to improve the economy, housing and the environment. This is a societal issue for Northern Ireland; it is not an issue specifically for NI Water.”[1]

This is not a message which will be well received by an international investor community that is increasingly driven by Environmental, Social and Governance considerations.

Housing

Investors are also interested in investing in regions where employees can access affordable housing.

Currently homelessness in Northern Ireland is at a record high while housebuilding is at a historic low.

In the past one of NI’s most attractive selling points to attract and retain people, businesses and investment was the affordability of house prices compared to GB and Ireland.

With housing demand consistently outstripping housing supply that advantage is being eroded.

Rent inflation in Belfast is now one of the highest in the UK and average rents are higher than Wales and several English regions. Northern Ireland is no longer the cheapest place to own a home in the UK with average prices now above £200,000 (Halifax, November 2024).

For this generation, the opportunity to buy or rent their own homes falls far short of what was available to their parents. If left unchecked this intergenerational disparity will undermine the region’s ability to retain its future workforce.

Conclusion

Wastewater infrastructure represents a systemic crisis that threatens long-term regional growth and will erode investor confidence in Northern Ireland’s potential.

Northern Ireland needs a balanced economy which plays to its engineering and manufacturing strengths – sectors which require physical infrastructure and water connections. The infrastructure of the future, such as data centres, is also heavily reliant on water for cooling purposes.

From an economic, environmental, societal and reputational perspective, Northern Ireland needs a functioning wastewater infrastructure. It is an indispensable building block for a successful modern economy.

Without that foundational infrastructure, Northern Ireland’s opportunity in new and emerging sectors will fall short of its potential.

September 2025