Youngsters have to save longer before buying a house

3rd February 2014, Comments 0 comments

Youngsters have to save money for a longer span of time before they can buy their own house as banks are imposing stricter requirements on those asking for a loan.

Last year, the average amount of cash that house buyers had to cough up before being granted a loan, was EUR 65,229.

The figure is EUR 8,000 (or 13 percent) up on 2012, the Confederation of Real Estate Professions (CIB) calculated.

At the same time, the number of people under 34 to be granted a loan, was 9 percent down on the year.

Banks are more reluctant to give loans that cover a longer span of time, and demand house buyers to bring in more cash before buying.

The banks point to the stricter guidelines the National Bank issued during the financial crisis.

Dajo Hermans of the CIB says the real estate sector is happy with the stricter guidelines.

"Belgian banks have a reputation of thinking twice before granting house buyers a loan. This is good, because it can prevent a housing bubble. On the other hand, we shouldn't exaggerate. Banks shouldn't be too strict, and still give young people the opportunity to buy a house by granting them a loan."

Flemish government steps in


The Flemish government is playing a crucial role in the matter.

The Flemish Housing Fund (Vlaams Woonfonds) and the Flemish Association for Affordable Housing (Vlaamse Maatschappij voor Sociaal Wonen) granted loans worth a record EUR 835 million last year.

Both organisations apply flexible conditions for potential house buyers (the loan can cover the total value of the new property, and interest rates are low), if these house buyers meet certain standards (their salary should not exceed a certain amount, and a maximum price of EUR 202,000 was set for the new property).

 

Flandersnews.be / Expatica

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