Many of us will know young people that are having difficulty in being able to purchase a decent home of their own. A couple of weeks ago Immotheker released figures that show that for two thirds of young adults stepping onto the property ladder is an unattainable dream. 10 years ago, young people accounted for 61% of those that lent money to buy a home through Immotheker. This has now fallen to 41%.
A sharp increase in property prices in recent years has seen many younger people priced out of the market. However, Immotheker says that stricter rules on mortgages that were brought in by the National Bank of Belgium have served to make it more difficult still for young people to get a loan. The rules decree that a lender may lend no more than 90% of the purchase value of the property they wish to buy. As young people often don’t have (tens of) thousands of euro in savings, the rule prevents them from getting a mortgage.
However, the National Bank of Belgium denies that the rules on mortgages are serving to shut people out from the property market. Speaking at a press conference on Monday morning, the Governor of the National Bank of Belgium said that during 2020 despite the coronavirus pandemic almost as much money was lent to home buyers as in 2019 that was a record year. Furthermore, 35% of those taking out a mortgage are young people, and this is stable compared with previous years.
Mr Wunsch added that banks take into account the specific needs of younger home buyers. “The rules are more flexible for first time buyers”, the Governor of the National Bank of Belgium told the press conference.