ANP
NOS Nieuws•vandaag, 13:00
The housing market must take greater account of risks due to climate change. The Netherlands Authority for the Financial Markets (AFM) warns of increasing damage to homes in the future. This should be included in the value and therefore the prices of houses, the regulator believes. Otherwise, people will pay too much for a home and could face high repair costs in the future.
Increasingly extreme weather conditions put homes at greater risk of flood damage and foundation problems. “We are increasingly confronted with extreme weather in the Netherlands,” says AFM chairman Laura van Geest. “That means more rain, rising sea levels, but also periods of drought, which in turn threatens the foundation.” According to the AFM, one million homes will experience foundation problems before 2050 that will not be insured.
“One in eight homeowners will probably have to deal with it,” says Van Geest. The average repair costs are around 54,000 euros. “But this can also amount to 100,000 euros.” While 85 percent of homeowners with foundation risks are not aware of this. “If you don’t know it, it’s not included in the price, and that basically means you’ve bought a pig in a poke.”
Flood damage can also cause additional costs, but this is only partly insured. 59 percent of the Dutch surface is vulnerable to this.
‘Little awareness’
“We think it is important that people who buy a house are aware of the risks so that they can be included in the price,” says Van Geest. This is not happening now because there is so little awareness. Sellers are also not obliged to make information about foundation and flood risks available. The data about this is also not always considered reliable.
And so the possible damage should be included in the price of the house, the regulator believes. There must be more transparency about the risks during the purchasing process and future repairs must be taken into account during the appraisal and financing phase.
“We would ideally like to see some kind of climate label created so that people when they buy a house know how the house is doing and the risks it entails, so they can include that in the price. Either this is done through self-regulation or the government makes doesn’t matter to us. As long as it happens.”
Loss of power
There is a disadvantage to this, says the AFM. Buyers may face a loss of capital and people who have just bought a house may be faced with a mortgage that is higher than the value of the house. As a result, this group may be left with a residual debt upon sale.
According to Van Geest, it is also important not to forget that there may still be repair costs with an adjusted house price. “If you take into account repair costs of an average of 50,000 euros for a house with a foundation risk that was previously worth 300,000 euros, then the house is worth 250,000. It is then cheaper. The risk is that you then forget that you may have to repair it. So we think it is important that you not only pay the right price for the house, but also that you know that you may have to pay those repair costs at some point.”
2023-11-07 12:00:01
#AFM #climate #risks #included #house #prices
