Minister ticks off banks over ground rent

Finance minister Jan Kees de Jager has told the banks they need to take action to end the impasse over property on privately-held ground, news agency ANP reports.

Home owners have raised the alarm over banks’ reluctance to give mortgages to people who want to buy a home which is on privately-held land and have to pay ground rent or erfpacht.
This is because of uncertainty about the terms and conditions and about how high the rent is likely to be in the future, the banks say.
Tens of thousands of homes have become impossible to sell because of the banks’ position.

Meanwhile, the finance ministry, sector regulator AFM and the banks have agreed to reduce the size of maximum mortgages which home owners can borrow.
From August 1, mortgages will be limited to 110% of the value of the house and the mortgage must include provisions to repay at least 50% of the loan.
The aim of the new measures is to stop people borrowing more than they can afford to repay.

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