One in 10 homeowners thinks or knows for sure their house has a risk of foundations problems, according to a survey by the Netherlands Authority for the Financial Markets (AFM).

However, half of the households surveyed do not know anything about their home’s foundations and a quarter incorrectly believe their insurer will pay for damage. Meanwhile one in six mortgage owners believes their property is at risk of flooding and almost half think their insurer will pay out – despite flooding insurance being removed from standard policies after major floods in Limburg.

Tony Lee A Fong, mortgages manager at the AFM, said in a press release that the financial authority is particularly concerned about awareness of crumbling foundations, which can be vulnerable in peat and clay areas as well as in houses on wooden piles in sandy soil. “It is essential that (potential) homeowners are informed in good time…about possible mortgage damage,” he said.

Warning

The AFM first issued a warning about the risks of foundations problems and flooding on Dutch property values, after being asked by the European Central Bank to research climate risks in 2023.

In 2024, a government advice body found 425,000 Dutch properties need urgent repairs and up to a million will soon need foundations works, which can cost €120,000 per house. Housing minister Mona Keijzer told a government committee earlier this month that although there will be a national fund offering lower-cost loans, homeowners are liable to pay for repairs.

“There will be people who fall out of the boat,” said Geert Gabriëls, MP for GroenLinks-PvdA, suggesting some homeowners might not be able to sleep at night once they realise the extent of the problem.

The Economist, studying the impact of climate change on global property values, said Amsterdam house prices could drop by some 40% if true risks are factored in. Some foreign financiers are refusing to fund Dutch building projects without flood risk assessments and Sandra Phlippen, chief economist at ABN Amro, told The Sunday Times last year that she feared that poorer and riskier parts of the Netherlands could literally become sink estates.

The latest AFM survey was based on 698 panelists from a representative, online panel of around 4,500 households with mortgages. The Netherlands has Europe’s highest household mortgage debt as a percentage of GDP.