Buying a house anywhere is a complicated and demanding process; choosing a location, property type and style are just some of the many things that need to be considered when purchasing a house or flat. This difficulty can be exacerbated when buying a property abroad – the combination of restricted access to the location and unfamiliarity with a foreign buying process can result in delays. This article is a brief introduction to buying property in The Netherlands and will cover how to find the best home for you along with how to go about purchasing it.
How expensive is buying in the Netherlands?
There is no denying that buying a house in The Netherlands is expensive – a shortage of housing has led prices to rise significantly, and these prices are not likely to fall anytime soon. However, the rate of increase has started to slow, and 500,000 new builds are estimated to be completed by 2025. Some of the most expensive cities to buy property in are Amsterdam, The Hague and Utrecht. The cost of housing varies drastically from different areas, getting as low as €213,000 in Groningen and as high as €388,000 in Noord Holland.
There are additional costs when buying in the Netherlands to consider; the most substantial being the 10% deposit which must be made pre-sale and is then deducted from the cost of the house after sale. You will also need to consider additional costs; if a mortgage is needed you will need to budget for another 5-7% of the purchase price to pay for the relevant taxes and services.
Mortgages work in a similar way in the Netherlands to the UK – some banks will offer an 100% mortgage, but more often than not you will need a 10% deposit to purchase a property. The two most popular mortgage options are annuity mortgages (the borrower pays the same amount each month for the entire term of the mortgage) and linear mortgages (the amount paid each month decreases as the term of the mortgage goes on). Bear in mind that it might be harder to get a mortgage if you are a non-EU resident, new to a job or on a lower income – you will need to provide your passport, BSN (citizen service number) and proof of employment/income. The mortgage process can be incredibly difficult to navigate and is not a decision to be taken lightly, for this reason we highly recommend seeking the advice of a financial adviser with the relevant knowledge and expertise.
Choosing a property in the Netherlands
Despite the shortage of property available in the Netherlands, finding what is for sale is relatively easy. There is a wide variety of different websites available such as Funda and Expatica – the latter is a website specifically designed for those moving to the Netherlands from elsewhere. If you’re looking in a particular location, there are also some websites that service certain areas that can help make your search more focused. In order to be in with a chance of purchasing a property you really love and is right for you, you should check these sites regularly to ensure you can enquire quickly when you see a listing that fits your requirements. Viewings are often only conducted between 9-5 and so can book up fast. Property moves very quickly in the Netherlands, so you need to make sure you have a finger on the pulse of the property market.
Making use of a property agent can make your search quicker and more efficient. Whilst it is an additional cost, it is an investment to help ensure peace of mind and expertise. Property agents can not only help you find properties that fit your specifications, but can also arrange meetings, negotiations, and the final sale. This can make your life significantly easier, especially if you choose a property agent who specialises in purchases for expats, as these agents can assist with any linguistic barriers. It is recommended to find an agent who is NVM registered – the NVM is the Dutch association of Real Estate Brokers and Experts, and so choosing an agent that is associated with this body can help ensure quality service.
What to consider when buying a property?
Where is the property? Location is one of the most important factors to consider when purchasing a property – transports, shops, restaurants, and crime rates are all determined by where you buy.
Structure – a structural survey should always be conducted before purchase. Not carrying one out is a huge risk that could have expensive consequences. It is also important to find out whether the property is listed.
Furnishings – Most Dutch homes do not come with furnishings; it is important to clarify what is included.
Contract – Some apartments in the Netherlands are run by the building’s Association of Owners, who maintain the building using the monthly payments of the other owners. These are not always maintained effectively and do not have a particularly good reputation. You may also want to check if you are required to pay an annual leasehold payment.
How to go about buying a property?
- Complete the Sale
Once you find a home you like, it’s time to make an offer. You may be tempted to offer below asking price, but ultimately, this may lose you the property as due to the housing shortage other buyers will often offer over the asking price, even as an initial offer.
- Arrange an appraisal
To secure a mortgage in the Netherlands, you will need to arrange an appraisal report to be carried out by a valuer. As mentioned previously, we also strongly suggest conducting a structural survey to ensure the property is structurally sound.
- Exchange contracts
After negotiations are completed, the terms will be set out in a preliminary purchase contract – this commits you to the purchase, unless the terms cannot be met.
- Pay the deposit
It is usually set out in the preliminary purchase contract that you must transfer 10% of the purchase value to the seller’s notary to act as a deposit. Should you back out of the contract, this will be paid to the seller.
- Hire a notary
You are unable sell a property in the Netherlands without a notary – this is the legal mediator between the buyer and seller who draws up the relevant contracts. You will need to choose your own notary when selling, and as with property agents, different notaries offer different services for different prices.
- Complete the sale
Upon the closing date, you will go to the estate agent and ensure that the property has been left in the condition agreed – your property agent can also attend. The deeds will then be exchanged, and the mortgage deeds signed, making you the legal owner of the property.
- Register your address
Last but not least, you will need to register your new address with the Gemeente.
The Netherlands is a beautiful country and an incredibly popular place for expats to relocate to. Whilst it might seem like a complicated process on paper, there is no reason for this to put you off, especially with the assistance of a property agent and financial adviser. Buying a house anywhere is never simple, and if you feel like the Netherlands if the right place for you to relocate to, start the process now and organise a no-obligation consultation with one of our financial advisers.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.