Tightening of borrowing in Brussels: the cdH says major blow

Tightening of borrowing in Brussels: the cdH says major blow
Benoît Cerexhe (of the cdH) is worried about the impossibility for young households to get on the property ladder.© Belga

If they come to fruition, the reiterated intentions of the federal government to tighten up the conditions for banking institutions, to grant mortgage credit, will hit all Brussels youngsters seeking to own property hard. Youngsters are unlikely to do so without a war chest which they are not likely to have. They are also unlikely to have the help of very generous wealthy parents. This assertion was made by the Leader of the cdH in the Brussels parliament, Benoît Cerexhe.

He says that, in the capital, the measure will lead to an increased dualisation for the city, and encourage an urban exodus of youngsters and families.

On Tuesday, the Brussels Leader for the cdH (Humanist Democratic Centre), commented, “Already in April of this year, vague desires of imposing stringent regulation for all mortgages with a loan-to-value of above 80% were heavily apparent, through the actions of the Finance Minister, Johan Van Overtveldt, in the Michel government. This would have forced prospective home owners to pay for the remaining 20% using their own funds, as well as related costs.”

He went on, “Such costs would have included property lawyers’ costs, registration costs and potential costs linked to renovating the property bought. These would have amounted to between 25% and 30% of the value of the property bought. Hence, it seems the reason for the measure once again being on the federal government’s agenda. It has hardly been watered down compared to the initial proposal.”

Benoît Cerexhe, says that this measure will “cause serious harm to policies aiming to maintain, or better improve, the middle classes in the Brussels region. This is because in practice, whether in the former or latest version, the policy will come back to limiting the borrowing capacities above 80% of the value of the property bought. It will force prospective property owners to put cash down for a sum, which very few young households are physically capable of doing, as they do not have it.”

Specifically, prospective purchasers must be aware that sales of apartments in Brussels were negotiated in 2016 for an average price of €233,945, and individual houses for an average price of €443,998. The cdH Leader stressed to the Brussels parliament that the federal measure would therefore place the onus back on the Brussels parliament. It would have to decide whether to implement legislation which is likely to enable the purchase of a property only by households with at least around €65,000 of their own funds when they buy an apartment. He suggested that when wishing to buy a house, the equivalent sum would be €135,000.

The Brussels Times

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