Dutch Need to Help Underwater Homeowners More, Brokers Say
The biggest group of Dutch property brokers called on the government and banks to help revive the country’s housing market by easing the terms on debt that homeowners take on when they sell properties for less than they owe on their mortgages.
The government this year introduced measures that allow underwater property owners to deduct costs and interest on loans that cover the remainder of a mortgage when their house is sold. That period should be extended to 20 years from 10 years, the NVM trade group said in a statement today.
Prime Minister Mark Rutte’s coalition government is struggling to find ways to spark a sluggish housing market while reining in household debt levels that are among Europe’s highest. House prices have dropped by 20 percent since 2008 and will continue to fall for another two years, according to central bank forecasts.
Banks could help boost the market by improving the terms of the loans, which are currently treated as unsecured credit that commands high interest rates, NVM said. More than 30 percent of Dutch residential mortgages are underwater, the country’s central bank said in March.
“A substantial part of home owners who are underwater should be able to move on in the market based on their income,” said Ger Hukker, chairman of the Nieuwegein-based group. “If we would take small, simple measures like these, transaction flows could easily improve by 10 percent from now.”
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