Tougher rules on mortgages announced by the financial services sector watchdog AFM on Tuesday will need a change in the law, the finance ministry said on Wednesday evening.

The AFM said it planned to end the practice of allowing people to borrow more than the value of their home. This means people will no longer be able to borrow money to pay legal fees and taxes
‘The AFM does not have the power to make this a firm measure,’ a finance ministry spokesman told the Financieele Dagblad. ‘It will require a change in the law.’
However, the AFM does have the power to check whether banks are being too liberal on a case by case basis, the spokesman said.
The finance ministry will now look at the AFM’s proposals with an eye on the social and economic implications.
Mortgage providers and estate agents have criticised the AFM’s plans, saying reducing the amount of money house buyers can borrow will make it very difficult for starters to get a foot on the housing ladder.