With the housing market expected to remain tight for the coming year, why not invest in your current property ? Continuing low interest rates make building an extension or doing up your kitchen a viable option.
If you are looking to move to a bigger house because you are working more at home, or you have a growing family but can’t find the right place, investing in your current property and boosting its value may well be a sensible alternative.
An extension can give you an extra room which could be all you need to make your home future proof for the next few years – particularly if you are happy with the area you are living in.
You can finance an extension or major renovations with your savings, but you may also be able to extend your current mortgage, remortgage or even take out a second loan to pay for the work, and take advantage of the low interest rates at the same time. Work out how much you can borrow using our mortgage calculator and make an appointment with one of our advisors to discuss the best options for you.
There are also a few legal and other changes underway which might impact on your decision.
Mortgage tax relief
The new government has not yet said it has any plans to make more changes to the Dutch mortgage tax relief system, despite calls for action by the European Union. The Dutch system is currently one of the most generous in Europe.
Nevertheless, mortgage tax relief is being cut slightly next year, from 43% to 40%, and this will affect you if you are paying tax in the highest bracket.
Market conditions
Experts expect house prices in the Netherlands to continue to rise in 2022 and that interest rates will remain both stable and low. Economists at ABN Amro, for example, suggest house prices could rise by 12% this year after going up by an average of 15% in 2021. The upward trend is also still likely in 2023.
The maximum price of a property covered by the national mortgage guarantee scheme (NGH) has gone up slightly to €355,000 but you can get a guarantee for as much as €368,300 if you decide to make your new home more energy efficient.
More choice – eventually
The new government has pledged to increase the housing stock by one million homes by 2030 and has appointed a special minister to oversee the process. Some two-thirds of these new homes will also be officially affordable, which means there should be more properties around for first time buyers in the future – but not, of course, in the next couple of years.
By the way, if you are looking for a more unusual property, the new government also plans to create 15,000 homes by redeveloping redundant offices every year as well.
New rules
A couple of pieces of new legislation come into effect this year, which ministers and local government officials hope will lead to more opportunities for buyers, and starters in particular.
The government has, for example, brought in legislation which allows local councils to stop investors buying up cheaper homes and renting them out. They hope this will give ordinary buyers an advantage over investors with deep pockets. Rotterdam, Amsterdam and Utrecht are all planning to make use of this new rule.
Good to know: if you do decide to buy or move, but are then posted abroad, you will still be able to rent out your home on a temporary basis while you are away.
