More first-time buyers are becoming homeowners
I’ve written before about all the different steps the government has been taking to help youngsters get a foot on the housing ladder, and now it seems they may be starting to have an effect. More first-time buyers are becoming homeowners.
According to new figures from the Dutch land registry office (Kadaster), first-time buyers accounted for almost half of all home sales in the final three months of last year.
In total, almost 60,000 homes changed hands between the beginning of October and the end of December, the highest number since 2020. Of that total, 28,000 were from people buying their first home in the Netherlands, a rise of almost 28% compared to a year ago.
There are several reasons for this, but I would suggest the main one is that more cheaper homes are coming onto the market, allowing starters to get a foot in the door. Changes to the Dutch system of rent controls, which have imposed more restrictions on landlords, have encouraged many to sell off their flats instead – capitalising on the surge in property prices in recent years.
More opportunities for buyers
Housing market economists suggest that landlords with just a couple of properties in particular are selling their smaller homes when they become empty to avoid them falling under the rent control system. That might mean less choice for tenants, but it also means more opportunities for buyers with limited budgets – in the short term at least.
There is more good news for would-be homeowners, particularly if you’re into city living. The big four Dutch cities, as well as student cities like Delft, Eindhoven, and Leiden, were in particular demand. In Amsterdam and Utrecht, first-time buyers accounted for 66% of the transactions in the final three months of last year!
In the longer term, however, these rent controls could also have another negative side effect, forcing people who want to rent to buy instead – and that means even more competition for the scarce number of properties for sale, and in turn, even more pressure to drive up prices. Even more reason, then, to get a foot on the housing ladder now if you can.
The Kadaster’s own experts also expect the number of first-time buyers to increase even further in the coming period. Interest rates have come down a little, making buying more attractive. Small landlords will continue to sell when two-year tenancies expire. And, of course, there are so many different schemes to encourage youngsters in particular to take the plunge.
Increase your borrowing capacity
I’ve written about these before, but it’s worth going through them again quickly, given the current situation in the market and the need to increase your borrowing capacity if you can.
If you are under 35, you don’t have to pay property transfer tax on your first home, as long as it costs less than €525,000. If you are single, you can borrow an additional €17,000 – to help you compete against dual-income couples. If you buy a low-energy label property, you can borrow more to pay for energy efficiency measures. If you buy a high-energy label home, you can borrow more because the banks assume your energy bills will be lower.
Remember too that there is no transfer tax on newly built properties, and since these typically have very high energy labels, you can borrow a bit more on top.
Adding new floors
Of course, it would be wrong to say that the market has suddenly transformed and everyone can buy the house of their dreams. There is still a major shortage of supply, and that looks set to continue for a couple of years to come. But there are a few innovative solutions in the works.
One measure the government is keen on is encouraging property owners to add a new floor to the top of an existing building. In fact, the housing ministry estimates that a further 100,000 new homes could be created by adding new floors to residential buildings by 2030.
Can’t wait that long? Why not check with your landlord if they might be interested in selling to you directly? I’ve had several clients who have been lucky enough to buy the home they’ve been renting, and that is a win-win situation for everyone.
