Mortgage lenders will lend much more money to people who buy an energy-efficient home. They are allowed to borrow more because the energy bill is so low. The difference can be up to 50,000 euros. ‘This creates a division in the housing market.’
When financing a poorly insulated home with an energy label E, F, or G, only the income and monthly costs will be taken into account in order to determine the maximum mortgage for the buyer. When purchasing a well-insulated home (label A or B), from next year you can borrow 10,000 euros more with the same income. And for a so-called zero-on-the-meter home, even an extra 50,000 euros.
Banks may therefore take into account the energy bill that the new home owner will receive every month when calculating the mortgage payment. Those who have low heating costs can pay more on their mortgage and vice versa.
This is evident from the new guidelines for mortgages in 2024 that are now on the desk of outgoing Finance Minister Kaag. These guidelines determine the maximum mortgage that banks may grant to home buyers. The measure is good news for the energy transition but bad news for the owner of an energy-guzzling home.
Housing market professor Peter Boelhouwer thinks that the sales price of a home with a low energy label will increasingly deviate from a house with a high energy label. “As a result, there will really be a division in the housing market between sustainable and non-sustainable houses. If the housing market rises very slightly, houses with E, F and G will fall in price. And with large increases in the market, prices of poorly insulated homes do not rise or rise very slightly. It will become increasingly difficult to sell houses with a low energy label.” About 15 percent of Dutch houses have such a very poor energy label and that can save thousands of euros per year in energy costs. A home with energy label G uses about 50 percent more gas than a house with label A.
Mortgage broker De Hypotheker sees a danger in the new rules. “Rewarding the purchase of more energy-efficient homes has the effect of making these homes more expensive, so we do not think this is the right measure. This makes homes with a higher energy label increasingly less accessible to a large group of buyers,” says Carina Kloet of De Hypotheker. “In practice, we increasingly see that homes with an unfavorable energy label are less popular and expensive to upgrade. Our expectation is that this will increasingly divide the price in the coming years. Just like the division we see between ‘handy houses’ and houses that are completely ready to move in.”
Lavish
Thanks to the new lending standards, investing in energy efficiency is directly linked to the home value. According to the Eigen Huis Association, this is not entirely justified, because the label does not say everything about the actual energy consumption. Because residents with a green label can be lavish with energy, while residents of poorly insulated buildings may be as economical as possible. In addition, there are many homes with an old but still valid energy label that was created on the computer at the time and that may differ from a modern energy label that actually requires an expert to examine it.
Eigen Huis also points out that owners of homes with energy label A, for example, will benefit most from the new rules and rising house prices when they sell, while these are often homeowners who already have a good disposable income.
Insulation
You will no longer be allowed to sell or rent if the energy label is not good
The new mortgage rules also state that the buyer of a very poorly insulated home may borrow up to 20,000 euros extra to finance sustainability improvements. That money must be spent on, for example, insulation, solar panels or a heat pump. However, according to the Dutch Sustainable Energy Association, that amount is insufficient to substantially reduce the energy bill of a cold, drafty house. The additional loan amount should start at 30,000 euros, says the NVDE.
Boelhouwer points out that in a few years more regulations regarding energy labels will come from Europe. “It’s already that far in offices. With a label lower than C you are no longer allowed to rent it out. You also get this with homes, where you are no longer allowed to rent or sell it if the energy label is insufficient. The energy label will also play a role in determining the rent next year; if the house is poorly insulated, the rent will decrease. People and landlords with poorly insulated houses must do something. Sooner or later you have to insulate; of course we have our sustainability goals. There are numerous loans from banks and the Heat Fund to finance the sustainability of the home.”
Mortgage provider ING has already noticed that home buyers are flocking to homes with a favorable energy label. They are also willing to pay more for this and the bank will help them with the new guidelines. Almost 90 percent of home seekers do not want to go lower than energy label C and one in three home buyers wants label A or higher.
Earlier this year, the real estate agency NVM investigated that owners who make their home more sustainable to a higher energy label see the value of the property increase by an average of 7 percent, which is easily 30,000 euros.
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