‘Duurhuur’. This is the name under which the National Mortgage Guarantee (NHG), together with AEGON, ING, Florius, Vereniging Eigen Huis and BLG Wonen, is launching a pilot to give tenants who have no problems paying high rents a better chance of buying their own home. Customised mortgages will be the solution to this problem.
High rental costs inhibit buying ambitions
‘Duurhuurders’ is a collective term for households that pay a high rent each month for their rental property in the free sector. Almost two-thirds of the 574,000 ‘duurhuurders’ in the Netherlands spend more than 33% of their net income on rent. Despite the fact that over a longer period of time these tenants have proven to be able to bear their housing costs without concerns, they often do not qualify for a mortgage when they plan to buy a house, based on their income. And this while ‘duurhuurders’ sometimes pay higher rents than what they would be allowed to pay in mortgage charges. With the pilot, the NHG wants to offer this group of tenants more opportunities to acquire their own home.
Mortgage as tailor-made financing
The NHG and affiliated lenders want to use tailor-made financing to give ‘duurhuurders’ access to the housing market, which was previously not possible. This means that mortgage applications from this group are no longer subjected to a standard mortgage test, but are assessed separately. Lenders will deviate from the set lending standards, thus creating more financial room for providing a mortgage with NHG.
Despite this flexible support, long-term tenants still have to meet numerous requirements in order to qualify for a mortgage. For example, they have to be able to prove that they have been able to meet high rental costs for more than three years without incurring debts or reducing their savings. A stable income, a reliable rent payment history and future living costs are also taken into account in the maximum housing cost of the mortgage. The great advantage of such customisation is that a large group of potential homebuyers, including flex workers and the self-employed, may benefit from this pilot. However, the lenders involved will still decide for themselves whether to provide a mortgage to a long-term tenant.
The housing solution for long-term tenants?
Tenants who are renting for an extended period can already contact the financial advisors of the lenders involved (for Florius this will be the case from the end of March). You can also always contact independent mortgage advisors such as A&H Finance for more information about the possibilities. They will then first assess whether a long-term tenant is eligible for the pilot before processing the application any further. If there is sufficient room to provide the mortgage, the NHG will guarantee this individual customised solution.
Incidentally, this is not the first pilot that examines the possibilities for ‘duurhuurders’. BLG Wonen has already done research in the past. These findings are combined with the results of customised financing that will be offered by the parties involved in the next two years (or when a total of 1,000 mortgages has been reached). With a combined market share of 28%, this should be sufficient to make a qualitative judgement on this pilot and whether tailor-made finance will prove to be the future housing solution for long term renters.
Would you like to know more about the possibilities of buying a house in the Amsterdam region? Please contact us, we will be happy to tell you more!
