Financial implications of affordable home ownership products
Four Dutch products in international perspectives
M Elsinga (TU Delft - Architecture and the Built Environment)
JSCM Hoekstra (TU Delft - Architecture and the Built Environment)
CP Dol (TU Delft - Architecture and the Built Environment)
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Abstract
Many governments encourage home ownership and try to find ways to make this tenure more affordable for lower income groups. Well-known examples are Shared ownership and Home buy in the UK and Land Community Trust and Shared Equity Home Ownership in the USA. In the Netherlands, these types of products are popular among housing associations, which are private non-profit organisations. With the Dutch housing market in crisis, affordable home ownership products have gained popularity among house-seekers and social housing suppliers. This has resulted in a range of mostly complex products with different features which are not easy to compare. This paper aims to compare the financial performance of the various products under different economic conditions. This paper firstly puts the Dutch products into an international perspective by providing a typology based on an overview of the literature. Subsequently, each product is described in more detail and its financial consequences from a consumer as well as an investor perspective are calculated for three different economic scenarios. Finally, the paper reflects on how the Dutch products compare to the well-known products in the UK and the USA.