Northern Ireland’s housing industry has hit out at a more-than doubling in the cost of connecting newbuilds to the electricity network.

The Northern Ireland Federation of Housing Associations (NIFHA) and the Construction Employers Federation (CEF) said the increase in the standard connection charge for newbuilds of 12 or more dwellings came at a bad time for home builders.

The cost for such developments to connect each new home to the electricity network is set to rise from £1,094 to £1,974 in January, and then see a further increase to £2,445 in April.

The cost increase was announced in a decision paper in May. In it, NIE explain that the costs involved in connecting homes to the network have increased “beyond the level of inflation.”

It adds that if the standard connection charge “is not fully cost reflective” then the shortfall must be “recovered via distribution network charges that form part of all electricity bills.”

But the NIFHA and CEF say that the increase in connection charges will harm the ability of the home-building industry to meet the need for housing in Northern Ireland.

NI is currently facing a waiting list for social housing, and lack of supply of new homes has contributed to difficulties for first time buyers getting onto the housing ladder.

Seamus Leheny, chief executive of NIFHA, said: “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.

“Due to funding cuts this year to the Social Housing Development Programme, difficulties with NI Water, and increasing inflationary costs in building new homes – this significant increase from NIE Networks will impact all new social housing delivery, creating ‘the perfect storm’.

“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.”

CEF has spoken recently about its concerns with infrastructure issues in NI causing reductions and delays to the amount of homes being built.

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 home ownership.

“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 homebuilders currently face and we would urge the Utility Regulator and NIE Networks to urgently rethink the implications of what they are enforcing.”

A spokesperson for NI Networks said said it reviewed all connection charges very year.

“Recent rises in construction costs and inflation mean the standard connection charge is not currently reflective of the actual works undertaken and the associated costs incurred.

“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 NI Utility Regulator said NIE Networks had demonstrated that costs had increased beyond inflation, with a shortfall between its costs and the standard connection charge.

“This meant that the additional cost of the site works were being paid for by all electricity consumers.”

It had then held a consultation on a review of the standard connection charge, and then wrote to NIE Networks requesting a two-phase update of the charge, to what it said was a “fair and cost-reflective” level.