Housing finance in the Netherlands - the impact of structural developments on households and banks

In this paper we aim to describe how structural developments have affected the behaviour of households and banks with respect to the financing of home ownership. These structural developments relate to the housing market directly – for example the large extent of government interference – and to indirect factors. We mention supervisory rules, ie the impact of the Basel-I Accord, the seemingly perennial decline of inflation and the increased labour participation by women (chapter 2). Against the background of these structural factors we analyse the often interrelated consequences of the demand for mortgage loans, house prices, rising household debt ratios, securitisation by banks and other financial institutions, and the interest sensitivity of households (chapter 3). Finally, we review the impact on households and banks (chapter 4). At the end we offer our conclusions (chapter 5).