Introduction
In an earlier publication at the end of April, we highlighted how the Dutch mortgage market is further strengthening through increased attention to physical property risks, including foundation conditions, alongside traditional financial criteria. For a broader perspective on these developments, we refer to this article.
The Dutch housing market is widely regarded as stable and value-retaining. Beneath a significant portion of these properties, however, lies a growing problem: the foundation. Thanks to improved inspection technologies, there is increasing insight into both the scale and complexity of foundation-related issues in the Netherlands.
Where risks were once mainly associated with wooden pile foundations, it is now clear that many more types of foundations are susceptible to damage. At the same time, insights into suitable foundation solutions—based on soil conditions and construction methods—have evolved over time. These developments not only affect the technical assessment of properties but also influence underwriting criteria of residential mortgages and consumer behavior in the housing market.
What is foundation damage?
Every building rests on a foundation. Over time, different foundation techniques have been developed, depending on the type of structure and the characteristics of the soil. In particular, many homes built after the Second World War were designed with a limited lifespan in mind, including their foundations. Many of these properties are still in use today.
When a foundation no longer provides sufficient support, visible signs often appear first, such as cracks in walls, doors that no longer close properly, or misaligned window frames. In more severe cases, subsidence can occur, potentially leading to structural instability and even rendering a property uninhabitable.
The scale and diversity of the problem
According to a 2025 assessment by the Knowledge Centre for the Approach to Foundation Problems (KCAF), approximately 519,000 properties in the Netherlands face an elevated risk of foundation damage. Out of a total of around 10.2 million properties, this represents about 5%.
The risk is determined based on the type of foundation in combination with the underlying soil on which the property is built and the groundwater level. Combinations of these factors often lead to foundation risks. Some examples include:
- A combination of falling groundwater levels with a shallow foundation on peat soil. As the soil subsides, part of the foundation subsides along with it.
- A foundation on wooden piles with a groundwater level that regularly drops below the top of the wooden piles. The head of the pile is then frequently exposed to air, increasing the likelihood of rot and therefore creating a higher risk.
Not all combinations lead to an equally urgent risk. To assess the condition of a foundation, the first step is determining the type of foundation. If this information is unavailable, data from surrounding properties is used. Where that too is insufficient, model-based analyses are applied, incorporating factors such as the building’s age, size, and height.
The methods for determining foundation types are still under development. In derived and model-based analyses, inaccuracies are currently still possible. The only way to fully eliminate uncertainty is to carry out a complete foundation inspection.
Location is another key factor. In the western Netherlands, fluctuating groundwater levels can cause wooden foundation piles to dry out and deteriorate. In other regions, such as parts of the east, soil subsidence can lead to settlement issues. The causes of foundation damage therefore vary significantly by region.
Challenges in remediation
1. Limited repair capacity
The number of specialized contractors capable of carrying out foundation repairs is limited. Currently, around 1,000 homes can be addressed each year, far below the scale of the overall challenge.
2. High costs
Foundation repair is expensive, with average costs of around €92,000 per property. In addition, such work often has a major impact on the rest of the home. Kitchens and bathrooms, particularly those on the ground floor, may need to be removed or replaced. These costs are not insurable and must be borne entirely by the homeowner.
3. Dependence on neighboring properties
In densely built areas, many properties share structural elements or even foundations. This means repairs often require the cooperation and financial participation of neighbouring owners. Not all homeowners are willing or able to contribute. Legally enforcing cooperation is complex and time-consuming, which can delay urgently needed repairs.
Acceleration in the market
Although foundation issues have been known for decades, they have not historically played a formal role in the home-buying process. Unlike energy labels, for example, there has been no legal requirement to provide standardized information about a property’s foundation.
This has started to change in recent years. As of April 1, 2026, Dutch valuation reports include a standardized foundation risk classification ranging from A to E, with E indicating a very high risk or confirmed damage. For properties classified as D or E, additional investigation is strongly recommended.
This model and the associated follow-up steps are still under development. As a result, the policies of mortgage lenders are also evolving.
Mortgage lenders have adapted their underwriting policies accordingly, making it more difficult in some cases to finance properties with elevated foundation risks. This may change again in the future as new insights emerge or if risks are found to have been classified too conservatively.
This has led to situations where financing cannot be obtained and purchase agreements need to be terminated. As a result, the issue is shifting from the “back end” of the process (financing) to the “front end”: buyers, sellers, and purchase brokers are increasingly required to assess foundation risks before the purchase of a home.
A sector-wide covenant is currently being developed to improve the structural provision of foundation-related information, particularly at the start of the purchasing process. Until such agreements are finalized, lenders are compelled to rely on their own underwriting policies. Because there is no uniform and mandatory information framework available upfront, risks only emerge later in the process, forcing lenders to impose additional requirements and manage these risks during the application stage.
Contributing to solutions
DMPM actively contributes to the development of solutions to foundation-related issues. The interests of consumers and investors are aligned.
For consumers, it is crucial not to commit to long-term financial obligations for properties with structural risks. For investors, properties with foundation issues represent uncertain collateral. Both therefore benefit from having clarity about the condition of the foundation in advance.
DMPM participates in industry self-regulation and consultations through the Dutch Association of Insurers (Verbond van Verzekeraars), contributing to policy discussions and regulatory developments. In this capacity, DMPM has provided input on the changes to valuation reports introduced in April 2026. The organization also takes part in discussions with the National Mortgage Guarantee (NHG) regarding future standards, with a specific focus on how properties with potential or identified foundation risks can still be financed in a responsible way within NHG frameworks, balancing risk management with continued access to homeownership.
To support existing customers, DMPM has joined the Sustainable Foundation Repair Fund (Fonds Duurzaam Funderingsherstel). This fund provides tailored loans to homeowners who encounter unexpected foundation problems and are unable to finance repairs through standard lending criteria. The scheme includes a three-year grace period with no repayments, followed by a repayment structure based on the borrower’s financial capacity.
Conclusion
Foundation damage in the Netherlands is a significant and complex challenge, but it is receiving increasing attention in both policy and practice. The introduction of standardized risk assessments and new, somewhat stricter mortgage acceptance criteria marks an important step toward greater transparency and risk management. The acceptance criteria of lenders may change in the near future as new insights emerge, even more reliable data on foundations becomes available, and sector-wide guidelines are developed.
DMPM remains committed to working with industry partners to develop sustainable solutions, always keeping the interests of both consumers and investors at the forefront.