First-Time Buyers Struggle as Upgraders Dominate Dutch Mortgage Market

First-Time Buyers Struggle as Upgraders Dominate Dutch Mortgage Market

The Dutch housing market is undergoing a notable shift. After months of first-time buyers (starters) leading mortgage applications, homeowners looking to move up the property ladder are closing the gap. In January 2026, roughly 51% of mortgage applications were submitted by first-time buyers, down from 55% a year earlier, while upgraders rose to 49% of the total. This reversal highlights growing challenges for newcomers entering the market and underscores the widening financial advantage of existing homeowners.

The Shift in Mortgage Application Trends

Data from mortgage advisers indicate that in the first half of 2025, first-time buyers increased their applications by 18%, whereas upgraders grew by 12%. However, trends shifted in the last quarter:

• Q4 2025: Upgrader applications surged by 19%, compared to an 11% rise for starters.
• January 2026: The split between first-time buyers and upgraders was nearly even at 51% and 49% respectively.

This reversal marks a break from the previous year, when the influx of landlords selling cheaper rental properties fuelled opportunities for first-time buyers. Now, rising home prices and diminishing affordable options are tipping the balance.

Financial Advantages of Existing Homeowners

Existing homeowners benefit from several factors that first-time buyers cannot match:

1. Accumulated Equity: As homeowners pay down their mortgage, they build equity that can be used as a down payment on a new property.
2. Lower Interest Rates: Many homeowners secured lower mortgage rates in previous years, which they can transfer (via a rate portability feature) when purchasing their next home.
3. Strong Credit Profiles: A history of mortgage payments often results in a more favourable credit assessment.

These advantages give upgraders greater borrowing capacity and reduce the burden of high interest rates, effectively pushing first-time buyers into a competitive disadvantage.

Impact on First-Time Buyers and Rental Conversions

Landlords selling off their smaller rental units—often more affordable, starter-friendly apartments—provided relief to first-time buyers in 2024. Yet, as these properties are absorbed by upgraders or repositioned at higher price points, the supply of genuinely affordable homes is shrinking.

For starters, the challenges include:

• Steep Property Prices: Average home prices continue to climb, driven by strong demand from all segments.
• Tight Rental Market: With fewer rental units on the market, some potential first-time buyers are forced to remain in rentals longer, saving up larger deposits.
• Limited Social Housing: Waiting lists for gemeente (municipal) or woningcorporatie (housing association) properties grow longer, delaying access to subsidised homes.

Without intervention or new supply in the lower price brackets, first-time buyers may find it increasingly difficult to make their initial move into homeownership.

Government Measures and Potential Solutions

Recognising the squeeze on starters, housing experts emphasise the need for policy measures to level the playing field:

• Expanded Mortgage Guarantees for Starters: Similar to the existing National Mortgage Guarantee (NHG), a targeted scheme could lower down payment requirements for first-time buyers.
• Incentives for Social Housing Development: Encouraging gemeenten and woningcorporaties to build more affordable units through subsidies or tax breaks.
• Regulating Speculative Sales: Introducing tighter rules on buy-to-let investors to discourage rapid resale at inflated prices.
• Tax Benefits for First-Time Buyers: Offering a temporary tax credit or reduced transfer tax to lower upfront costs.

While these measures require careful design and political will, they could help restore balance and ensure that newcomers are not permanently priced out of the market.

Tips for First-Time Buyers in a Competitive Market

Despite the challenges, first-time buyers can adopt strategies to enhance their prospects:

• Boost Your Down Payment: Increase savings or use family support to build a larger deposit, which improves loan-to-value ratios and interest rates.
• Consider Alternative Locations: Explore towns or suburbs with lower price growth but good commuter links to major cities.
• Lock in Interest Rates Early: Pre-approval and rate locking can protect against sudden rate hikes.
• Negotiate on Extras: Request seller contributions toward closing costs or minor repairs to reduce your own expenses.
• Leverage Government Support: Check eligibility for huurtoeslag (rental allowance) if staying in temporary rental, or local starter schemes that offer vouchers or grants.

By combining financial readiness with flexibility and thorough market research, starters can still find a pathway into homeownership.

Looking Ahead: Balancing the Market

The growing share of upgraders in mortgage applications signals a dynamic housing market in flux. First-time buyers need both improved market conditions and supportive policies to thrive. Continued sale of former rentals may temporarily ease shortages, but without additional affordable supply and targeted support, starters risk being sidelined by more established homeowners.

For anyone navigating this complex landscape, staying informed and seeking expert guidance is vital.

Ready to explore rental and buying options? Discover Luntero—your easiest way to find rental listings and receive tailored housing insights in the Netherlands.