Rising interest rates led to a 40% drop in the number of mortgages finalised in the first six months of this year, according to new research by the land registry office Kadaster. 

The drop was down to both new mortgages – their number fell 16% year on year – and remortgages and top-up loans. Their total fell by an “enormous” 76%, the Kadaster researchers said.

Most of those buying homes were first timers.

The decline means the total value of mortgages extended in the first six months of the year was down 43% on the first half of 2022 to around €50 billion. The average amount borrowed to buy a house fell 8% to € 418,000.

However, the average amount borrowed per property – the loan-to-value – rose from 85.5% in the second half of 2022 to 86.9%, the first increase since 2020.

The research also showed that one in three mortgages with the worst energy labels of E, F and G had a loan-to-value ratio of over 100%. This reflects the option to borrow an extra €9,000 per property, regardless of income, to invest in energy-saving measures. 

National statistics agency CBS said last month house prices in the Netherlands now appear to have stabilised, with prices rising a marginal 0.5% in July compared with June.

The year-on-year drop has now been 5.5% for the past three months, indicating that the decline in prices which started last August has now come to an end. 

Henk Janssen, from specialist mortgage advisors Expat Mortgages, told Dutch News he expects the market to start picking up because interest rates have been at around 4% for almost a year now – and that is still low compared with many other countries.

“And what is the alternative for an international worker, especially if they are planning to stay here three or more years?” he said. “The rental market is very overheated with low supply, not much supply and very high prices.”