Dynamic Credit has launched its consumer buy-to-let platform in the Netherlands, offering consumers clear and attractive mortgage loans for properties they want to buy and rent out. The program is also an opportunity for institutional investors to enter a market with large potential for further growth by investing in buy-to-let mortgages makes it possible for institutional investors to fund these loans and enter a market with large potential for further growth.

Brand New Day Bank has awarded Dynamic Credit a mandate funding these loans. The “Dynamic Verhuurhypotheek” facilitates the creation of more private rent properties in the Netherlands, which are needed to have a more balanced housing sector.

More private rent needed

Compared to the owner-occupied mortgage market, the buy-to-let market in the Netherlands is relatively small and underdeveloped. Currently, only 10% of the total housing stock is classified as “private sector rent“, of which a majority is provided through institutions, and a small part by private individuals.

The current pressure on the Dutch housing market can be relieved by a larger private rental sector. This is also recognized by Dutch Central Bank President, Klaas Knot in his speech[1]. While the current number of private rental houses is inadequate, Dynamic Credit believes the balance can be restored to the housing market through supporting the private landlord. Private individuals can now finance properties using the company’s buy-to-let mortgage offering and through this can help boost the private rental sector.

Bouwe Kuik, Head of Borrower Commerce at Dynamic Credit says: “For the average person, purchasing a house is less affordable given rising prices, and rental options in the “middle” segment are very limited. We believe that providing potential landlords with affordable, better and more efficient financing options will help us towards a better rental market in the Netherlands.”

Buy-to-let Netherlands - Familiar terrain

The Dutch owner-occupied mortgage market is familiar terrain for many (international) institutional investors. Consumer buy-to-let loans (in Dutch: verhuurhypotheken) are mostly similar to owner-occupied loans with the added feature that the borrower gets the possibility to rent out the property. Dynamic Credit is one of the first asset managers to facilitate institutional investors in investing in buy-to-let mortgages. As an established lender in the Dutch owner-occupied mortgage market, Dynamic Credit is uniquely positioned to be a partner in accessing the Dutch consumer buy-to-let market and provide an accessible and transparent loan application process for borrowers.

The Consumer buy-to-let underwriting criteria are almost identical to those for owner-occupied mortgage loans. Underwriting focuses on excess income instead of rental income from the property.

Jasper Koops, Portfolio Manager at Dynamic Credit states: “As an established direct lender, we are uniquely positioned to transform the buy-to-let market in the Netherlands by making it more transparent for investors and borrowers. We believe our consumer buy-to-let platform provides institutional investors a unique entry opportunity into a market with large potential for further growth, as is acknowledged by Brand New Day Bank awarding us a mandate. It is our ambition to become a market leader in buy-to-let mortgages in the Netherlands.”

Thierry Schaap, Managing Director at Brand New Day Bank, commented: “The consumer buy-to-let program of Dynamic Credit also offers pensioners with well-off children a good way to increase their pension. The children can help their parents by buying their house and rent it back to them. This way wealth will remain in the family, the parents can increase their pension and the children invest in real estate. As online pension bank Brand New Day is pleased to fund the Dynamic Verhuurhypotheek.’

For more information on the Dynamic Verhuurhypotheek product, visit dynamiccredit.nl/verhuurhypotheek.

Sources

[1] De woningmarkt in macro-economisch perspectief, Speech Klaas Knot, 11 februari 2019