Building fast is better
Minister Ollongren of the Interior and Kingdom Relations also deals with the housing market. She recently took measures to make the housing market ‘more accessible’, as it is then called, to start-ups and middle-income earners. For example, the rent increase for private sector housing is capped at 2.5% (equal to the ceiling for social housing). Municipalities will have the option of introducing buy-back protection to prevent affordable owner-occupied homes from being bought by investors who will then rent them out. And the possibilities for extending a temporary rental contract are extended.
With the NVM I come to the conclusion that the minister will regulate the rental market almost completely. On the other hand, the intervention could have been heavier. Earlier there was talk of an ’emergency middle rent button’ whereby the rent would be capped at a percentage of the WOZ value. The Association of Institutional Investors in the Netherlands calls the measures now taken sensible and is pleased that the decision was not taken to limit initial rents.
The question is whether it will yield a lot for starters and middle-income earners. They are now often dependent on more expensive rental homes because there are no affordable housing available or because they earn just too little to qualify for a mortgage. As a result, they have to rent a house that will yield a higher monthly income (even if the rent is increased by up to 2.5% annually) and they cannot save for their own home.
I repeat what I wrote earlier: don’t look for it in regulation, but in stimulation. Building quickly is better than millimetering over rules with a marginal effect. The number of transactions is still at the same level, the willingness to buy remains high and the mortgage interest rate super low, albeit just not all-time low anymore, but it doesn’t make much difference. The lowest mortgage rate for an annuity mortgage with an NHG guarantee and a 30-year fixed-interest period rose from 1.65% to 1.7% during the corona crisis. For a 10-year fixed-interest period it went from 0.94% to 1.09%. The only thing that is still needed: sufficient supply of housing to relax on the price front. Quick to build. Put more energy into that!