Ms Sarah Neary:

I thank the committee for the invitation to attend this meeting on the subject of Brexit and the housing market. Unfortunately, Mr. Damian Allen, who manages the team within the Department of Housing, Planning and Local Government responsible for the co-ordination of all matters relating to Brexit, the European Union and international business insofar as it relates to the functions of the Department, was called away on an urgent personal matter and cannot be with us this morning. I will deliver the opening statement in his absence. I hope that we will be able to answer any questions members may have on the issues raised. I have responsibility for building standards. I am accompanied by my colleagues, Mr. John Wickham, who also has responsibility for building standards, Mr. David Kelly, who has responsibility for homelessness and housing inclusion supports, and Mr. Paul Hogan, who led the development and co-ordination of the national planning framework, NPF.

I will set out the arrangements in place in the Department for Brexit. We have a cross-divisional Brexit team, on which all of the departmental functions impacted by Brexit are represented. It provides a forum in which to discuss Brexit-related matters and is chaired by Mr. Allen. Brexit-related matters are also kept under regular review by the Department's management board. Externally, the Department participates in the co-ordination structures established to facilitate a whole-of-Government response. This includes the interdepartmental group on the EU and Brexit and the Brexit co-ordinators' group. The Department has been participating in the process of preparedness and contingency planning through these cross-departmental structures, and this process is ongoing.

Insofar as the functional responsibilities of the Department are concerned, it should be noted that Brexit issues arise primarily in relation to water, in the context of environmental co-operation and water and marine framework directives; planning, in the context of the environmental impact assessment, EIA, and strategic environmental assessment, SEA, processes; maritime spatial planning; franchise, in terms of voting arrangement; and housing, which is the subject matter today.

The extent to which Brexit will impact on the housing market is still uncertain at this point. It will be determined by the outcome of the process around the withdrawal agreement but also by the nature of the future relationship between the EU and the UK. However, our analysis to date suggests that the key issues arising for the Department in respect of Brexit and the housing market are in the areas of population and housing projections, construction materials and homelessness.

On population and housing projections, it should be noted that the national planning framework is based on mid-range long-term demographic and econometric projections that do not factor in Brexit-specific impacts, largely because these are highly uncertain. The key variables for housing demand are the scale of and distribution of population growth which, in turn, are heavily influenced by economic performance. In the long term, the NPF projects national population growth of around 1 million people by 2040 and the need for at least 550,000 new homes based on continued modest economic growth. The NPF strategy seeks to focus growth on the regions, in addition to the greater Dublin area. In the short to medium term, there will be fluctuations in population growth and distribution, as well as in economic performance, and it is possible that Brexit could impact such variability. In this regard, a long-term strategy is necessary to project growth and influence distribution based on a trajectory that can reflect the net outcome as a whole over a longer period. The key variable in population change in Ireland is net migration, which is highly volatile, even over short timescales. Average net migration was approximately 20,000 people per annum into Ireland between 1996 and 2016, but this ranged from a record high of 97,000 people in 2008 to minus 27,500 in 2010, a swing of almost 125,000 people in only three years.

Clearly, Brexit has the potential to create further sharp swings in migration patterns. However, the NPF strategy is based on net migration of around 20,000 people per annum to 2040.

Capacity constraints in the economy in areas such as employment, housing and transport limit the potential for net migration to be sustained at very high levels. In the face of such uncertainty, however, the Department is currently planning based on a mid-range population growth scenario set out in the NPF, while monitoring evidence of changes in this pattern. This means the long-term housing requirement remains as projected with short-term variation, for example, to address the shortfall in national output since 2010.

I will now address construction products and materials, an area which we are also conscious is very important in regard to Brexit. Construction products and materials are regulated by EU Regulation No. 305/2011, which lays down harmonised conditions for the marketing of construction products, known as the construction products regulation, CPR. The primary purpose of the CPR is to break down technical barriers to trade to ensure the free movement of construction products across member states within the European Union. To achieve this, construction products for which a harmonised European product standard is in force or for which a European technical assessment has been issued need a declaration of performance from the manufacturer and must be affixed with the conformité Européenne, CE, marking before they can be placed on the internal market. In order to affix the CE marking, most construction products require the intervention of a notified body. Notified bodies are designated bodies that carry out third-party tasks, typically being product certification bodies, factory production control certification bodies and testing laboratories. The degree of intervention of a notified body in the placing of a product on the market is set out in the technical specifications. Under the CPR, notified bodies must be established in a member state and be designated by the member state's notifying authority. The Department of Housing, Planning and Local Government is the notifying authority in Ireland.

Post-Brexit, UK manufacturers, distributors and importers of construction products placing products on the Irish market will need to continue to comply with the CPR. The European Commission issued a notice under the title, withdrawal of the United Kingdom and EU rules in the field of industrial products, confirming this earlier this year. We disseminated the notice to key industry stakeholders. All product suppliers who rely on a UK-notified body to support their product declaration for CE marking purposes now need to obtain alternative EU-notified bodies in preparation for Brexit. At present the National Standards Authority of Ireland, NSAI, is the only notified body in Ireland. It provides certification services to many construction product manufacturers and is working with all the relevant stakeholders on issues arising.

As we do not yet know what the eventual outcomes of the Brexit negotiations will be, we are planning on the basis that the UK becomes a third country as of 30 March 2019. In this regard, it is important that businesses and stakeholders do the same. We will continue to liaise with colleagues in the Department of Business, Enterprise and Innovation, the National Standards Authority of Ireland, the Irish National Accreditation Board and various industry stakeholders to support them in preparing for potential outcomes of Brexit.

On homelessness, it is our strong view that significant increases in net migration would present a concern in respect of increased numbers of households having difficulty in accessing affordable accommodation. This highlights the critical importance of a number of the Department’s programmes relating to increased delivery of all types of homes - social, affordable and private - as well as strengthened regulation of the private rental market and the delivery of additional emergency accommodation for households experiencing homelessness. Naturally, it is the Department’s ambition that increased housing output will be sufficient to meet demand. However, we are also cognisant of the potential risk in this area and will monitor the position very closely. Budget 2019 includes significant additional funding for the provision of emergency accommodation and the Department will work closely with the local authorities, which have statutory responsibility in this area.

The Department is also working closely with other Departments, both bilaterally and through the structures of the homelessness interagency group established by the Minister last year.

In Dublin, where demand for housing is highest and homelessness is at its highest level, the Dublin Regional Homeless Executive, DRHE, is responsible for the delivery of homeless services across the four local authorities. Earlier this year, the DRHE established a working group to ensure that robust responses are in place for families and single people presenting to homeless services with uncertainty around their eligibility for social housing supports. The main focus of the group is to ensure that a collaborative approach between homeless services and the other statutory agencies and Departments involved is in place across the Dublin region. Brexit is one of the chief issues under consideration by this group.

In conclusion, the Department will continue to keep matters related to Brexit and the housing market under close review and issues arising are being worked through. In addition to the issues that I have referred to, the Department is liaising with colleagues in a number of other Departments and public bodies on a range of housing issues that may be impacted by Brexit, including issues relating to construction costs, the labour market and potential skills shortages in the future. We will continue this work.

I thank the committee again for inviting the Department to today's meeting. My colleagues and I are looking forward to engaging with members on the three issues highlighted, namely, population and housing projections, construction materials, and the potential impacts on homelessness. We will be happy to answer any questions.