Utrecht’s buy-to-let housing ban led to more homes for first-time owners

Utrecht’s buy-to-let housing ban led to more homes for first-time owners


Utrecht’s buy-to-let housing ban led to more homes for first-time owners

Can this be a good practice to turn the tide on rampant investment housing ownership?

Almost two years ago, the City of Utrecht promulgated a local law, which banned people and companies from buying a second residential property unless they guaranteed to occupy the property themselves or by a family member. The measure aimed to ensure that the number of empty or rental places in the Dutch city would be cut down allowing for young people looking to buy a home a better chance to realize their dream.

Recently, Utrecht’s mayor Sharon Dijksma was happy to report that the restriction has had a positive effect on the housing market situation in the city.

From the first results, the introduction of purchase protection appears to be extremely effective and first-time buyers are reaping the benefits. In addition, the increases in transfer tax from 2021 may also play a role in the improved position of first-time buyers in Utrecht,” said the mayor in a letter sent to the City Council last Friday, according to NL Times.

More details on Utrecht’s housing law

The ban on second homes applies to properties valued up to 587,000 euros, the kind of price range most sought after by individuals and young families.

The success of the measure is more than clear. Utrecht residential real estate sold over the last two years was purchased by an intended resident 78 percent of the time, while investors only managed to snap up 11 percent of homes put on the market, according to the Dutch Land Registry.

Compare these numbers to the situation in the period 2018-2021 and you’ll get an idea about the magnitude of the shift and the rapid positive change this has brought about. The share of properties bought to be then rented out has decreased from 13% to just 2% this year.

Investors were especially squeezed out of the market regarding homes in the lower price ranges, to the benefit of newcomers to the real estate market. First-time buyers bought 46 percent of homes sold in the last six months of 2021, which rose to 53 percent during the last six months of 2023. 

The city government is considering updating the regulation to set the value limit of properties to 716,000 euros, which would essentially protect 80% of local homes from being bought as an investment only.


Source link