Various cities are introducing regulations to protect purchases to prevent investors from “stealing” homes from the start. Mi-Lan Kok explains how this regulation affects people who want to buy a home, and the benefits it brings to the housing market.
The reason for the ban on buying – the need to regulate the local housing market. Relatively cheap real estate is often bought by investors and then offered for rent at high prices. As a result, it is difficult for beginners and families to buy suitable housing. We see that they need to make a few suggestions before getting a property.
What is purchase protection regulation?
The Regulation on the Protection of Purchases is a new provision in the Housing Act, which entered into force on January 1, 2022. This measure gives municipalities the opportunity to ban the lease of existing cheap and medium-sized real estate, which is occupied by owners in some cities and districts. Buying protection should ensure that these homes remain affordable for buyers looking for their own homes, particularly beginners. The rental ban is in effect for four years after purchase. Homes that have already been rented out are not covered by this measure.
Low interest rates and additional mortgage options have made real estate investments particularly attractive to many investors. In the last quarter of 2020, 40 percent of homes in the major cities of Randstad were sold to investors. Beginners and investors often want to buy the same type of house. This has led to newcomers buying fewer homes, in part because real estate investors are ahead of them due to the fact that they have more financial options and can also offer sellers more financial security.
Amsterdam is headed by municipalities that introduce regulation
Late last year, Amsterdam was the first municipality to publish detailed plans. The legislature has given municipalities the freedom to set an upper limit for “cheap and medium” houses to be protected. Municipalities here make their choice. Amsterdam is expanding the conditions to the extreme: for all owner-occupied homes, worth WOZ up to 512,000 euros, after the purchase will be a ban on rent. Rotterdam chooses the NHG (National Mortgage Guarantee) limit of 355,000 euros, while in Haarlem the limit is 389,000 euros.
Many other large municipalities want to introduce similar rules for investors. These are not only big cities (Eindhoven, Rotterdam, Utrecht, Leeuwarden and The Hague), but also smaller cities. In the Amsterdam region this will include places like Almere, Amstelveen, Haarlem and Hufdorp. In addition, several Brabant villages are considering using this opportunity to give beginners more opportunities to purchase real estate. This means that the investor needs to conduct additional research to find out if he can rent out the property.
Step in the right direction
With this offer, investors will find it harder to buy affordable homes and give beginners and families more opportunities to purchase this property. Unfortunately, this measure alone is not enough to solve the housing shortage in the Dutch real estate market. There is a serious shortage of houses, and significant additions will have to be made in the coming years, but at least this is a good new rule that provides more opportunities for private buyers.
Do you have any questions about how purchasing protection regulations can affect you? If so, or if you have any other questions regarding real estate and buying or selling your home, feel free to contact Mie-Lan Kok real estate agency. Their experienced agents are on hand to provide any assistance you may need.