Video series: ‘Sofa talks’ about property – tips for first-time buyers
This series sees experts at ABN AMRO answer questions from clients. On the sofa today: Judith van Summeren (Property Director, ABN AMRO) and Kees Adema (Wealth Planning Expert, ABN AMRO). In this episode, both experts zoom in on the topic of property and answer questions from first-time buyers. What government support is out there for first-time buyers? Will market conditions improve for them this year?
What support is out there for first-time buyers in 2024?
Judith: “There have been two particularly positive developments for first-time buyers. The first is the increased threshold for a National Mortgage Guarantee (NHG) mortgage. It’s now € 435,000. If you’re a first-time buyer purchasing a property up to a value of € 435,000, you’ll pay lower mortgage interest and benefit from lower monthly repayments. The second is relief on property transfer tax. This is for first-time buyers aged up to 35 who are purchasing a property with a value of up to € 510,000.”
Will it be easier for first-time buyers to purchase a property?
Judith: “Let’s start by saying that, currently, about 50% of buyers are first-time buyers. They’ve been hugely helped by the 6 to 8% wage increases negotiated in collective labour agreements in 2023. Many people are also looking to buy their first property as a way of escaping the very challenging rental market.
Housing affordability has improved because first-time buyers’ wages have gone up. In addition, house prices in 2023 have picked up after a drop, while mortgage rates have decreased and remain more or less stable. That will improve the situation for first-time buyers. Historically speaking, however, houses are still very expensive in relation to average incomes.”
Kees: “That’s absolutely true. And then there’s the lack of housing, which has only worsened over the past years. The coming years don’t look promising either, with fewer houses being built than forecast. That’s not what first-time buyers want to hear. But there’s good news: the Dutch government has introduced much tougher rules for property investors. This has led some investors to put their current rental properties up for sale. As these properties are usually in a lower segment, they present an opportunity for first-time buyers.”
Can my parents still help me to buy a house?
Kees: “Yes, of course. Although the Dutch government has scrapped the €100,000 tax-free gift for home purchases, parents can still gift a one-off amount of around €31,000 tax-free to their children aged under 40. Parents can also gift about €6,600 tax-free to their children each year. So there are still ways for parents to help their children to purchase a home.”
How big is the housing shortage?
Judith: “There’s a huge housing shortage right now. To address it, we’ll need to explore other types of housing and home construction, such as tiny houses. Another thing is that the number of people in an average Dutch household has shrunk significantly in recent years. That’s led to a higher number of households overall. Obviously, many of those households don’t need a three-bed house. That’s why we need to seriously consider other type of housing, or convert properties into separate dwellings. We’ll need to get bold and creative.”
