Housing Update: Rising Interest Rates and Market Moves

Interest rates have doubled since January and there are signs that house prices may not be rising as quickly. So what does this mean for the housing market? And should you consider remortgaging? Here’s a roundup of the latest housing market news.

What to do with interest rates

Interest rates have barely been out of the news since the start of the year when they started to rise in earnest. Base rates have actually increased by about 1% since January. This means that if you took out a 10-year fixed rate mortgage at the beginning of 2022, you would pay around 1% interest and now it would be 2%. If you have a 20-year contract, you would now pay 2.5%.

The impact of the increase is, of course, to reduce borrowing capacity or create higher monthly costs for buyers.

But, despite that, Henk Janssenthe founder of Expat Mortgages, says you always get a good deal.

“Today’s rates are equal to 2019 rates, when everyone said they had never been lower,” Henk points out. “If those rates were incredible in 2019, they still are today, even though they have been lower in the meantime.”

Should you remortgage?

Figures released earlier this week showed the number of mortgages taken out in the first three months of the year was up 37% from a year ago. But most of these mortgages were for people who were paying off their mortgages so they could invest in their property – like installing extra insulation – or who wanted to secure a good interest rate for a longer period before they do not increase again.

In fact, in 2021, 70% of total lending was for mortgages and 30% for first-time buyers. In 2019, it was the opposite!

“The penalty for remortgaging has decreased due to higher interest rates,” Henk points out. “We have clients paying 3.5% or 4% or even more, so it’s always worth looking into the possibility of re-mortgaging, especially if you think rates will go up further.”

If you want to know if the mortgage is worth it for you, contact a mortgage advisor.

Last market

That being said, what if you actually want to buy a property? After all, the choice may be lacking, but apartments and houses are still changing hands, and 14,000 people managed to sign a deal in February.

There are also signs that the steady rise in house prices may be slowing, with the NVM reporting a 2.1% decline in prices in the first three months of the year on Thursday.

Henk says being an international worker may even give you a slight edge right now.

“The Dutch are taking a bit of a step back from the market due to rising prices and shortage of supply,” he says. “I have noticed, for example, that a property will have fewer appointments to view because people become more suspicious. So there are signs of a slowdown. But international workers are more used to taking risks, so they keep buying.

Of course, there are many other uncertainties hanging over the housing market, and no one yet knows what the impact of the war in Ukraine and soaring inflation will be. It is, says Henk, very difficult to predict the influence of these on house prices and interest rates.

Ultimately, be prepared, so if you see a property you like, you can move on quickly.

Learn more

If you want to learn more about the housing market and your mortgage options, Expat Mortgages hosts a series of webinars. The next one will be April 13.. If you would like to meet the team in person, why not come and say hello at IamExpat trade fair in Amsterdam on Saturday April 9.

If you already own a property and would like to know more about your options, there is a special webinar for you on April 20.

The mission of a minister

There has also been a lot of media coverage recently about the new government’s plans to tackle the housing crisis, and Housing Minister Hugo de Jonge has unveiled an ambitious program to try to speed up the building process – and ensure that 100,000 new homes are built every year. finished.

“I welcome the measurements, but to be honest, it’s about seeing and then believing,” says Henk. “The bottom line is that we need to build more houses.”

Moreover, we still do not know what the impact of changes in work patterns will be. Prices in the suburbs and on the outskirts of major cities continue to rise as people seek larger spaces where they can have a home office, Henk points out.

“In our case,” he smiles, “the office becomes a place to socialize with your colleagues, then you go home to work.”

Do you have more questions? Contact Henk and the rest of the Expat Mortgages team through the website.

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