Who has a chance to win the Flemish Housing Guarantee? What are the conditions? What is the critique? Find out everything you need to know about the Flemish Government’s Flemish Housing Guarantee.
What is the Flemish Housing Guarantee?
Update Nov. 5, 2024: Flemish Housing Minister Melissa Depraetere (Vooruit) announced that the Flemish Housing Guarantee will be postponed. She did not report when the measure will start. Building Federation Embuild Flanders is calling for the Woonwaarborg to be introduced as soon as possible, as buyers now need an average of 70,000 euros of their own funds to buy a home.
The Flemish Woonwaarborg is only valid in Flanders, Belgium. The Woonwaarborg helps young Flemings to pay their own contribution when taking out a mortgage loan. This for the purchase or construction of a first home of their own. The implementation of the Flemish Woonwaarborg still requires approval from the Flemish Parliament and is expected to go into effect after Jan. 1, 2025. Banks today often require up to 20 percent equity when taking out a mortgage loan, making it difficult for many young Flemish people without parental or family support to meet this amount. The Flemish government wants to address this problem by providing a guarantee, making it easier for young buyers to get a loan.
How much is the Flemish Housing Guarantee?
The Flemish government guarantees the last 10 percent of the contribution for young buyers, without enough equity, to get a loan. In return, the banks must pay a premium to Flanders for this guarantee. With this, they cover the cost of the guarantee system, they limit the risk to the public investment.
Who is the Flemish Housing Guarantee for?
The measure is aimed at young families with a stable and high enough income to pay off a loan, but who have too little of their own and no support from parents or family. The Flemish government sees this as a targeted measure to improve housing affordability.
What are the conditions?
- The property is for personal use.
- The purchase value of the property is up to 434,830 euros.
- You are a first time buyer. Je hebt dus nog nooit eerder een hypotheeklening gekregen.
- The guarantee period is up to the first 5 years of the mortgage loan term.
What is the criticism?
The Flemish Woonwaarborg is not spared criticism. Here are the 5 biggest concerns:
- The supply of housing should increase to improve affordability rather than providing a housing guarantee to the“happy few” (5,000 families).
- High interest rates have a greater impact on loan affordability than equity.
- The Flemish government itself created the need for a Housing Guarantee because it abolished the Flemish Housing Bonus in January 2020.
- The granting of the Flemish Housing Bonus caused housing prices to rise. Possibly this will also happen with the activation of the Flemish Housing Guarantee. The Flemish government is steering housing seekers toward buying a home, while prices on the rental market are also rising sharply. For example, the average rent last year (2023) was no less than 868 euros.
- The declining number of mortgage loans granted, the declining number of building permits granted, and steep inflation create a greater challenge than Flemish Residential Guaranty can likely address.
Sources: De Morgen, De Tijd, Embuild Vlaanderen, Het Nieuwsblad, Hln, Knack, Vrt
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Stiasteny, L. (2024, November 5). Flemish Housing Guarantee. Apartment.be. Accessed on (date XX/XX/202X), from https://www.appartement.be/vlaamse-woonwaarborg-wetgeving
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