People who buy a house with a bad energy label are more likely than others to borrow more than the property is officially worth, according to new figures from the land registry office Kadaster.

In the first six months of this year, almost 17% of mortgages for homes with an F or G label had a loan-to-value ratio of between 110% and 150%, the Kadaster said. But just 2% of homes with an A or B label involved mortgages of more than 110% of the property value.

Officially in the Netherlands, home buyers can borrow up to 100% of the property’s value. However, at the beginning of this year, the government introduced new guidelines allowing people to borrow more in specific circumstances, based on the recommendations of family spending institute Nibud.

If the house has an energy label of E, F, or G, buyers can borrow an extra €20,000 to help boost its energy efficiency. Buyers taking on a property with at least a B label can borrow up to €50,000 more than the value because they are considered to have more disposable income due to lower energy bills.

In addition, single people earning a yearly minimum of €28,000 can borrow an extra €16,000 to help boost their chances of being able to afford a house.

The average loan-to-value of a Dutch house purchase is now nearly 87% and has been rising for two years, but is still well down on the 92% recorded five years ago.

In the first six months of the year, 170,000 mortgages were finalised in the Netherlands, up 12% on the first half of 2023 but virtually unchanged on the second half. But the number of mortgages is still well down compared with the 2020 to 2022 peak, the Kadaster said.

People borrowed an average of €449,000 to buy a home, up 3.6% on the previous quarter and 7.3% more than in the same period last year.

The total Dutch mortgage debt is currently €59.4 trillion, the Kadaster said. This is unchanged on the second half of 2023 but up 22% on the same period last year. However it is still below the €80 trillion plus recorded in 2021 and 2022.