Financial services
Transforming rental housing in the Netherlands into an investable asset class
How Macquarie is supporting the growth of the Dutch private rental sector with buy-to-let (BTL) mortgages
Swipe for more
| Sector | Financial Markets |
| Sub-sector | Fixed income |
| Location | Netherlands |
Opportunity
Following regulatory and structural changes to the housing and mortgage market, BTL mortgages are in increasing demand in the Dutch private rental sector.
In the wake of the 2008-09 financial crisis, the Dutch government and financial regulator introduced a series of changes that were designed to protect the financial system and housing market for the future, including:
- A limit to high loan-to-value mortgages, which required new homeowners to save for a deposit. Prior to 2008, it was the market standard for borrowers to take out a 100 per cent plus loan-to-value mortgage that could go as high as 120 per cent based on the property’s foreclosure value.
- A change to the tax regime, which previously allowed homeowners to offset their mortgage interest against various taxes, encouraging buyers to take out as large an interest only home loan as possible.
- A reduction in funding for social housing with the government encouraging social Housing Associations to sell housing stock to private investors.
There have been further social and demographic changes, with population growth and decreasing family sizes leading to an increased demand for flexible and temporary housing solutions.
Approach
Macquarie helped to establish Domivest, a specialist non-bank BTL lender in the Netherlands, and power it’s growth in a relationship approaching ten years.
BTL mortgages are loans to purchase residential properties for investment purposes. The loans, which are pooled together and structured into new securities to mitigate the default risk inherent with individual borrowers, are a way of transforming rental housing into an investable asset class.
Outcome
Macquarie has warehoused assets and arranged multiple public securitisations for Domivest, supporting the growth of private investment in the Dutch rental sector. This funding enables the development and refurbishment of properties for private rent, helping professional landlords to address the shortfall created by a shrinking social housing sector and declining home ownership affordability.
Bond issue
Since 2019, Macquarie has supported a series of securitisations with total issuance of nearly €3 billion.
Strong investor demand
All securitisations have been fully placed and significantly oversubscribed, with orders received from investors across European Union, the UK and the US
Scale and market position
Domivest has built a loan book of approximately €2 billion of mortgage loans, establishing itself as a leading specialist lender in the Dutch private rental market.
Product innovation
Domivest continues to expand its offering, including financing for assisted living properties and longer-dated mortgages for older borrowers secured against owner-occupied homes. To support this growth, Macquarie arranged a forward flow agreement with a major UK insurance company.
"Through careful planning and extensive discussions with investors and institutions, we were able to generate significant investor appetite for the securitisations and new innovative lending products. Within Europe, Macquarie has built up a fifteen-year track record in bringing innovative new issuers to the capital markets, transforming good business ideas into financial reality."
Gianfranco Simionato
Head of Structured Credit & Securitisation EMEA
Fixed Income and Currencies, EMEA
Learn more