High rent but still no mortgage? New scheme may help home-buyers

Dual earners only need apply. Photo: DutchNews.nl
Photo: DutchNews.nl

A new scheme is being launched in the Netherlands to help tenants who pay high rents but have been unable to get a mortgage to buy a place of their own.

The scheme, which is being run under the auspices of the National Mortgage Guarantee agency, will help people who have been denied a mortgage even if they are paying more in rent than the monthly repayments would be.

Some 574,000 households in the Netherlands live in a rental property costing more than €765 a month and six in 10 are paying more than a third of their net income in rent, the NHG says.

‘People paying high rents often feel trapped,’ said NHG chairwoman Carla Muters. ‘They earn too much for social housing but cannot buy a suitable property because of their income. So they are forced to rent a home which is often more expensive than a home of their own would cost.’

ING, ABN Amro, BLG Wonen and Aegon are supporting the initiative, which will cover property costing up to the NHG limit of €355,000.

To qualify, tenants must have paid rent for at least three years without missing payments and they must have household income which is enough to pay all the costs associated with owning a home excluding savings. Freelancers and people on flexible contracts may also be able to take part.

The experiment will run for two years and will be expanded beyond the initial 1,000 mortgages if initial results are promising, the NHG said.

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