The housing market recovery is not as evident for more expensive properties because banks are charging higher interest rates for homes not covered by the mortgage guarantee scheme, the Financieele Dagblad says on Tuesday.

The national mortgage guarantee was introduced in 1995 to encourage home ownership and currently covers premises valued up to around €265,000. The guarantee means that if people default on a NHG mortgage, a special home ownership fund will pay off the debt.

Banks and insurers offer lower interest rates to people taking out an NHG mortgage because they are covered against default.

Before the crisis, the difference in rates was between 0.2 and 0.4 percentage points, the FD says. Now, however, the gap has stretched to around a full percentage point. Average NHG mortgages fixed for 10 years are around 3% while non-NHG mortgages are still in the 4% region.

‘People buying more expensive homes have not benefited as much from interest rate drops,’ Ger Hukker, chairman of the Dutch real estate organisation NVM, told the paper.

NVM figures show that detached homes are still taking longer to sell and have not gone up in price as much as cheaper flats. Many home owners do not want to cut the price of their property any further because of negative equity.

In July, the NHG limit will be cut to €245,000. The average house price is now around €220,000.