Spring housing market fever
Spring is always a busy time in the Dutch housing market but this year seems busier to me than most. And it also seems as if more new arrivals in the Netherlands are opting to buy a house straight away, rather than rent for a while. This is, of course, down to problems on the Dutch rental market – there really isn’t much out there if you are looking to spend a year or two getting to know the Netherlands and living in a rental property – as you are probably aware.
Why are there so few places to rent? It’s all down to changes in the Dutch system of rent controls, combined with an increase in taxes. The financial impact for small landlords has led many – if not most – to decide to sell up, reducing the supply of rental property. And that in turn means it is even more difficult to find something to rent.
Of course, there are benefits for the housing market because more homes are now being put up for sale and that is expanding choice for buyers. Perhaps another reason why I am so busy at the moment! But in the long run we are going to reach a point when all the rentals have been sold and then what options are left?
More homes on the market
In the meantime, what does all this mean for you, as someone looking to buy their first home in the Netherlands? According to the latest figures from the Dutch statistics agency CBS, the number of homes changing hands rose 21% in the first two months of this year – which shows there is definitely more choice out there. This is particularly true if you are looking for a smallish apartment in one of the bigger Dutch cities.
Prices are also flat – there was virtually no change between January and February and that is another indication that the market may be finally slowing down. So, there is no time like the present to start making your hunt for a new home a reality. And if you are nearing the age of 35, if you want to take advantage of a nice little tax break, make it sooner rather than later.
Spring housing market fever: bid insurance
By the way, you may have read about a new phenomenon called “bid insurance” which some mortgage brokers have started offering. It’s a way of insuring yourself if you decide to bid on a property before sorting out the financial side — otherwise, you risk owing thousands of euros in penalties if your mortgage falls through.
Sellers often prefer bids without financing conditions because it gives them certainty and speeds up the sales process, so waiving this condition can work to your advantage. If you take out bid insurance, you may be covered if your mortgage application is ultimately denied.
However, the premium for this type of insurance is often expensive and non-refundable. It only pays out if your financing falls through due to unforeseen circumstances. For example, if your mortgage is rejected because the appraisal value is too high, you may still have to cover the costs yourself. Insurers also impose strict conditions and may require a mortgage pre-approval or an income assessment in advance. This is something we can help you with.
While this insurance can be useful in an overheated housing market — especially if you have limited funds and want to minimise risk — it is not a foolproof solution. Expert advice and a realistic assessment of your borrowing capacity remain essential.
Find out your borrowing capacity
In other words, you might as well get your mortgage broker to confirm how much you can borrow – and we can do that within 24 hours as well – before you make an actual bid and save yourself the money.
It is never too early to start organising your paperwork anyway. It’s my “go to” standard advice for all prospective home buyers, so you are ready to move quickly, as soon as a potential new home pops up. So no matter how busy you are this spring, take a little time to get properly prepared.
It is never too early to start organising your paperwork anyway. It’s my “go to” standard advice for all prospective home buyers, so you are ready to move quickly, as soon as a potential new home pops up. So no matter how busy you are this spring, take a little time to get properly prepared.
