December 2012 saw a net increase of mortgage debt again, by EUR 900 million. According to banks, the mortgage production was relatively high in December, because households anticipated the new legislation on mortgage lending in the new year. On an annual basis, banks’ mortgage portfolio in November and December still rose by approximately 1.5 per cent, a halving compared to a year earlier.
There are several reasons for the decline in growth of mortgage lending. On the one hand, demand for mortgages has been going down for some time now. On the other, banks have tightened the conditions for issuing new loans. According to the banks, the situation in the housing market and the overall economic development are the cause for the decline in demand and the more stringent credit standards. In addition, the heightened attention for compliance with regulatory and legislative requirements on lending may have contributed to banks’ reluctance to provide new mortgage loans.
In November 2012, banks’ mortgage portfolio was smaller than in the preceding month as Dutch households, on balance, redeemed more than EUR 160 million on their mortgage debts. In December, the mortgage portfolio rose again, by EUR 900 million. According to banks, the mortgage production was relatively high in December, because households anticipated the new legislation on mortgage lending in the new year. Compared to 2011, the mortgage portfolio at the end of 2012 had grown by approximately EUR 8 billion (+1.5 per cent). At mid-2011 – when growth was not declining yet – the annual increase of banks’ mortgage portfolio stood at EUR 17 billion (+3.5 per cent). Since then, growth has gradually slowed down (See Chart).