NEW IRISH HOMES are being built to “stricter” environmental regulations when compared to new homes across the UK, placing an “extra barrier on developers in terms of cost”.

That’s according to a new ESRI study contrasting housing supply in Ireland, Northern Ireland, and the rest of the UK.

Stakeholders cited in the report remarked that Ireland has “stricter environmental regulations” than Northern Ireland and England.

The ESRI said these “soft costs” such as regulations and standards push up costs more than differences in the price of construction products.

Cost inflation on material products has been sharper in the UK than in Ireland, costs remain at a lower level in the UK.

However, while these are an “extra barrier” on cost, stakeholders noted that it “is more likely that other regions will catch up to Ireland’s environmental standards, rather than revert to looser requirements”.

The minimum specification expected for new developments in Ireland is also leading to increased costs.

New houses in Ireland are larger on average than comparable developments in England.

The ESRI report cited a study from the Department of Housing last year, which found that the cost-per-unit basis was 21-29% lower in Birmingham than Dublin.

Meanwhile, Dublin apartments have among the highest minimum floor space requirements amongst major European cities.

Increased costs are also associated with “delays and administrative burdens”, remarks the ESRI report.

The ESRI report cited an Oireachtas committee on Housing from February of last year in which it was stated that judicial review cases can add between €10,000 and €20,000 to the cost of an individual home.

It also states that the “ease with which individuals or third parties can appeal housing plans in Ireland has contributed to a significant share of homes stuck in the planning system”.

The report also calls for greater regulation of land markets.

While the ESRI said speculation in the land market in Ireland is “impacting land prices and hence the finished price of a house”.

The ESRI states that Ireland needs an official land price series, which would allow land values to be tracked and compared over time and on a regional basis.

The report also notes that attracting workers to the construction sector is a “challenge” for housing markets both here and across the UK and cited the need to adapt recruitment methods by hiring trainees and apprenticeships, or by attracting skilled workers who have left the industry to return.

However, the report said this is a more pressing concern for Northern Ireland and the UK due to Brexit, which is making it more difficult for net immigration into the UK.

Elsewhere, the report remarks that in Ireland, the traditional financial sector does not appear to be able to provide the amount of credit needed for the level of housing activity deemed necessary to meet the demand for housing.

Financial viability was cited as a significant problem in the private construction sector, particularly for the construction of apartments.

As a result, the ESRI report said a “certain amount of government investment is required on an ongoing basis to ensure there is a specific number of units added each year to the social and affordable stock of housing available”.

“To a certain extent, increased government investment is one way of alleviating some of the issues generated by the changes in the provision of credit by financial institutions post the financial crisis,” said the report.