Few Dutch lenders back joint household mortgages

The cabinet wants multiple households to purchase homes together to ease the national housing shortage. However, nearly all lenders are declining to participate because they consider the financial risks too large.

Mortgage advisory chain De Hypotheker compares more than 40 mortgage providers in the country. Only a handful of those currently offer options for three or four people to take out a home loan together.

Advisers say teaming up with friends or relatives can help buyers whose single income is not enough to secure a property. But borrowing limits are not simply added together across all applicants.

Lenders cautious over future departures

Lenders decide which combinations of buyers they accept, which incomes count toward the total, and what level of risk remains acceptable. Mike van Dijk, an adviser at De Hypotheker in Bergen op Zoom, says that hesitation makes sense.

The arrangement becomes particularly complex if one buyer decides to leave the property later on. The remaining owners must either shoulder the entire mortgage themselves or find an approved replacement buyer to step into the contract.

Because so few lenders offer these group mortgages, prospective buyers have very little choice when it comes to interest rates and terms. Van Dijk advises groups to map out borrowing limits early and agree on what happens if someone wants to move out in a few years.

Municipal rules and rental pressures

Lenders are not the only barrier facing groups of three or more buyers. Local municipal zoning plans frequently state that only a single household may occupy a home without a special permit.

Many municipalities also block property owners from splitting houses into smaller units. Housing Minister Elanor Boekholt-O’Sullivan has announced plans to review local rules that hinder home sharing, property splitting, and adding rooftop floors.

Sharing is already difficult for tenants under the Affordable Rent Act introduced by former housing minister Hugo de Jonge. That legislation gave individual tenants the right to separate rental contracts, leading many landlords to prefer single occupants or couples over shared student houses.

Student housing expertise centre Kenniscentrum Studentenhuisvesting warns that landlords are rapidly exiting the market as a result. The organisation projects that the country could lose 45,000 student rooms within two years.

Source: De Telegraaf