If the government really wants to stimulate a house building programme it should reduce mortgage tax relief and build more properties, the government’s macro-economic think-tank CPB said in a new report on Thursday.

The Netherlands has a shortage of some 300,000 homes at the moment and few new homes are being built, for a variety of reasons.

Brick by brick: pressure mounts on government to solve housing crisis

By reducing mortgage tax relief – which is being cut in stages to 37% by 2023 – house prices will rise less and this will ‘reduce prices and increase choice’, CPB researcher Stefan Groot told the NRC.

Mortgage tax relief, Groot told the paper, is effectively a subsidy to encourage people to spend more on a house than they can afford.

Similarly, by linking housing benefit to income and family size, people will no longer be stimulated to live in the biggest rental property they can, Groot said. Housing benefit is currently assessed according to the actual rent as well as income.

Breaking that link will also increase the choice for prospective tenants, the CPB says.

To stimulate developers and housing corporations to build more homes, local authorities should give more licences to building projects and offer space to build residential estates outside current city and town boundaries.

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