Risks in homeownership: a perspective on The Netherlands

Abstract

Purpose The purpose of this paper is to explore the risk factors in homeowners from the individual household’s perspectives within the owner-occupied housing sector of The Netherlands. Risk in home ownership from mortgage providers’ perspectives has received tremendous attention than individual home owner’s perspectives in existing literature following the financial crisis in 2007/2008 within the euro zone. Design/methodology/approach The paper adopted a broader review of extent literature on the different concepts and views on risk in homeownership. These concepts are unified into a framework that enhances our understanding of the perceived sophisticated risk in owner-occupier with focus on The Netherlands. Findings From the perspective of the homeowner, two main types of risks were identified: default payment and property price risk. The paper has unearthed a quantum number of factors which underline the above risks. These factors relate to the initial amount of mortgage loan taken out, the future housing expenses and the income development of the owner-occupier. Family disintegration is identified, as one of the main causes of mortgage default and that of property price risk are mainly influenced by income levels, interest rates and conditions in the social and private rental sectors. Research limitations/implications Findings of the paper are based on review of the extant literature in the context of the Dutch housing market. Possible rigorous situational analysis using other tools are recommended for further research. Originality/value This paper contributes to the much needed body of knowledge in the owner-occupied sector and provides a better understanding of risk in home ownership from the individual perspectives.

A Review of "Housing wealth and welfare", By Caroline Dewilde and Richard Ronald

“…There was a general trend from mainly detached and family supported home-ownership to more collective ownership and more mortgage debts (see also Donoso & Elsinga, 2017). Currently, we also observe more reliance on family support (see also Deng, Hoekstra, & Elsinga, 2016) and increasing awareness of the risks of home ownership (see Teye, de Haan, Elsinga, Bondinuba, & Gbadegesin, 2017). This change also affected the relation between housing wealth, social policy, and political ideology.…”

“…Whereas supporting low-income home-ownership reminds of the conservative rhetoric of Prime Minister Thatcher introducing the Right to Buy in 1980, in the epilogue, John Doling reflects on the Irish case and suggests this could be considered socialist as home-ownership is part of the assurance of people's welfare. The connection between housing wealth and welfare appears multidimensional and not simple (Teye et al, 2017), so what conclusion can be drawn? John Doling ends by saying 'the future may not be simply more of the same.'…”

Effectiveness of rent recovery strategies on residential real estate in Ibadan, Nigeria

“…Teye et al . (2017) explored the risk factors in homeowners from the individual household's perspectives within the owner-occupied housing sector of the Netherlands through a broader review of the extant literature on the different concepts and views on risk in homeownership.…”

“…However, none of these studies examined other rent recovery strategies and the outcome of the findings cannot be considered for the property market in Nigeria. Teye et al (2017) explored the risk factors in homeowners from the individual household's perspectives within the owner-occupied housing sector of the Netherlands through a broader review of the extant literature on the different concepts and views on risk in homeownership. The findings revealed that a quantum number of factors such as the initial amount of mortgage loan taken out, the future housing expenses among others underline default payment and property price risk.…”

Diffusion and Risks of House Prices in the Netherlands

“…Again, we follow standard practice and set Σ w i = I |w i | , where I |w i | is a |wi|-dimensional identity matrix. 1 By definition, (3.12) consists of a component that is independent of Σw i . We can reduce the computational time by expressing this independent component as a function Qν (|wi|, p, T ) given by…”