Dutch election update – Housing market reforms still ongoing

by: Philip Bokeloh

Prime Minister Rutte’s second government started its term in office facing severe problems in the housing market. Owing to the economic crisis and uncertainties about the mortgage interest relief scheme, housing transactions had sunk to rock bottom and prices were falling. Another challenge was the limited access to the rental segment due to the long waiting lists for social housing and the low availability of private rentals. And
in the non-residential sector, retail and office vacancies had soared to alarming heights. The situation was considered so serious that a special minister for housing was appointed to tackle the weaknesses in the market. A record number of reforms ensued, both in the rental and the owner-occupied segment. These reforms have brought about significant changes for the better. But some flaws persist. New-build activity, for instance, remains sluggish in the face of surging demand. The market for mid-market rentals is still far too small. Regional differences are widening. The quality of the housing stock is not up to modern standards. And
international institutions still warn about the scale of the mortgage volume. Clearly, there is a need for more policy-making. The next government can choose from a range of options. We believe that the following five measures could be particularly effective:

  • Relaxing the ‘Sustainable Urbanisation Ladder’ to spur extra new-build activity
  • Giving regional authorities more freedom to shape their housing policy
  • Enlarging the mid-rental market through reappraisal of housing association stock
  • Encouraging experiments to improve the quality of housing
  • Using pension savings to lower the mortgage volume
170309-Stembuzz-Housing-market-reforms-still-ongoing.pdf (529 KB)