Buy-to-let’s share in the housing market still growing

Despite the corona crisis and government intervention, small investors are still buying homes to rent in abundance. Preliminary figures from the Land Registry show that the share on the housing market of private landlords has increased further this year. The new construction for self-occupation obligation has not deterred investors in Amstelveen, Utrecht and other municipalities where this new system has been introduced. The large housing shortage and related spike in high house prices do not appear to be an obstacle in buying as of yet, where the share of private rental in the housing stock has also increased. 

Established providers such as NIBS and RNHB saw their buy-to-let portfolios grow further; ‘actually, the market just continued after the corona outbreak. Investors kept buying properties, ‘says Dirk van den Beukel of NIBC. The private rental sector has been on the rise for several years. While 4.4% of the housing stock of private investors was still 4.4% in 2015, this was 6% in 2018. In the first half of 2020, in the four major cities, up to 40% of home purchases went to private landlords, according to preliminary figures from the Land Registry. In the rest of the Netherlands this was about 20%. In the four major cities, close to 40% of home purchases went to private investors in the first half of 2020.

The market parties do not think that the higher tax will have the desired effect. ‘Investors invest for the long term, they are not going to stop such a measure. This could mean that investors have less money to invest in sustainability and that rents go up, ‘says Ivo Knottnerus, CEO of RNHB.

The mortgage providers expect a somewhat calmer first quarter in 2021, but after that they expect that the pace of sales will soon pick up again. The United Kingdom tried a similar tax measure in 2016, says Nestr’s Arnold van Hengstum. ‘There you saw a quarter with fewer transactions, then the ruler could pass it again. Unfortunately, the tax increase does not make it easier for a starter to find a home in the Netherlands either. ‘

Source: FD