Mortgage rates in the Netherlands are around one percentage point higher than in surrounding countries, according to the government’s macro-economic think-tank CPB.

The organisation bases its claims on figures from the European central bank. It carried out the research on behalf of housing minister Stef Blok.

One explaination for the difference is the lack of competition in the Dutch market, the CPB said. Apart from market leader Rabobank, the other three big Dutch mortgage providers are entirely or partly in state hands.

In addition, pension funds and foreign providers have tended to avoid the Dutch housing market, which they regard as inflated.

Competition

MPs have told ministers to come up with a plan to boost competition between Dutch banks before the summer.

The CPB says Dutch house prices have declined by 20% since 2008 but would be 5% higher than they currently are if mortgage rates reflected European trends.

Home-owners would currently pay at least 3.8% interest, fixed for five years, on a traditional repayment mortgage with a government guarantee.