Foundation Repair: Financiable for Homeowners?

ANALYSIS REPORT APRIL 2026 Foundation Repair: Financiable for Homeowners?

In short The Netherlands is facing foundation issues that will worsen without measures. In total, nearly half a million homeowners face a high risk of foundation problems or have a (possibly) vulnerable foundation. The highest risks affect over 120,000 owners for whom foundation repair is necessary. Repair is expensive, averaging €92,000, but costs vary significantly. Over 75,000 homeowners with foundation problems lack sufficient financial means to pay the repair costs directly. Taking out a loan appears to be an irresponsible financing option for over 25,000 homeowners. The AFM considers it important that foundation risks are identified in time and that repair costs can be financed responsibly.

Foundation Repair: Financiable for Homeowners? 2 ANALYSIS REPORT Executive Summary The Netherlands is facing foundation issues that will worsen without (preventive) measures, partly due to climate change. Damage to the foundation can cause small problems, such as cracks in walls and sticking doors. But it can also cause major problems, such as moisture, tilting, and risk of collapse. Foundation problems entail substantial financial risks for private homeowners. This is because this damage is not insurable and homeowners must in principle pay for foundation repairs themselves.

It is important that foundation problems are identified and addressed in time and that private homeowners can bear the costs of foundation repairs in a responsible manner.

Delaying repair measures can worsen the problem due to rising repair costs, depreciation of the property value, and increasing residual debt risks. Furthermore, the question arises as to whether homeowners have sufficient financial capacity to pay these repair costs directly or to finance them via a loan. To better understand the financial impact of foundation problems and the financing challenge for homeowners, deeper insight is needed into the foundation issue.

The AFM stands for sustainable financial well-being in the Netherlands; therefore, we specifically zoom in on the financial risks of foundation problems for private homeowners. In doing so, we translate the foundation issues at the building level to households living in their own owner-occupied homes. In total, nearly half a million private homeowners face a high risk of foundation problems or have a foundation that should be considered (possibly) vulnerable. However, the scale and urgency of these risks vary greatly per property. This is partly because changes in groundwater levels are uncertain.

We analyze per homeowner to what extent the repair costs can be paid directly or financed via a loan. In doing so, we focus exclusively on private homeowners living in properties with the highest risks where repair is necessary. We exclude the group of homeowners with (possibly) vulnerable foundations where risks play out in the longer term from this analysis.

The results of our research show the scale of the foundation repair challenge and the financing challenge, specifically for homeowners with foundation problems where repair is necessary:

• Over 120,000 homeowners suffer from such foundation problems that repair is necessary. The total foundation repair challenge for these homeowners is estimated at €11 billion. • Foundation repair costs vary greatly among homeowners. For the average homeowner, it amounts to €54,000 (median). Because repair costs for some homeowners are significantly higher, the average repair costs are €92,000. • Over 75,000 homeowners cannot pay the costs for full foundation repair directly from their liquid assets (bank and savings balances and investments). This group faces a significant shortfall in funds to pay the foundation repair costs directly: a total of €6 billion. • In total, over 25,000 homeowners with foundation problems fall outside the standard mortgage financing space if they were to take out a loan for the portion of repair costs they cannot pay directly. This group has a total shortfall of €3 billion to finance the foundation repair costs.

Foundation Repair: Financiable for Homeowners? 3 ANALYSIS REPORT Apart from the financing challenge, the foundation issue is so complex that it is not realistic to leave the responsibility for foundation repair entirely with the individual homeowner. Collective action is therefore necessary. It is important to keep attention for foundation risks that may arise in the longer term. With preventive measures, such as groundwater management, (further) foundation problems in the future can be prevented. The (financial) weighting of these foundation risks therefore requires care.

The AFM calls on various stakeholders to work together to ensure transparent and adequate information provision about foundation risks and responsible financing solutions for foundation repair.

For each, there is an important role in making risks visible, informing and activating homeowners and buyers, preventing over-indebtedness, and enabling timely foundation repair. To ensure that foundation risks are identified in time and that repair costs are financed responsibly, the AFM considers the following four actions important:

1. Ensure easily accessible, property-specific, and reliable information about foundation risks for homeowners. We see a role here for the Ministry of the Interior and Kingdom Relations (BZK), municipalities, real estate agents, and property platforms;
2. Ensure the availability of standardized foundation risk information during the orientation and purchase phase and the valuation and financing phase, for example in the form of a mandatory part of valuations and/or a foundation risk indicator. Parties that can play a role in this are BZK, the Dutch Association of Real Estate Appraisers (NRVT), real estate agents, and property platforms;
3. Investigate to what extent financing possibilities can be better utilized or strengthened in a responsible manner. This role can be further defined by parties such as mortgage providers, the Dutch Banking Association (NVB), National Mortgage Guarantee (NHG), and policymakers;
4. Investigate possible additional measures to reduce the financing shortfall. We see a role here for mortgage providers, the Fund for Sustainable Foundation Repair, and policymakers.

The AFM calls on the sector and stakeholders to work together from their role and responsibility to solve the foundation issue and the associated financing challenge.

In Chapter 6, we go deeper into this. This is to make the financial risks of foundation problems for private homeowners manageable now and in the future. With this report, we explicitly place the issue of financing foundation repair on the societal agenda. From our responsibility as a supervisor, we will actively engage in dialogue with involved parties to come to solutions.

Foundation Repair: Financiable for Homeowners? 4 ANALYSIS REPORT Risk Label 620,000 Buildings with at least one dwelling The Netherlands is facing foundation issues that will worsen without (preventive) measures. In this research, we zoom in on private homeowners with foundation problems. We do this in 3 steps: We zoom in on private homeowners with the highest foundation risks to analyze the financiability of foundation repair for them. For this group, foundation repair is necessary. We translate foundation problems at the building level to the level of dwellings and the households living in them. We look at buildings that have a high risk of foundation problems or a foundation that is (possibly) vulnerable in the longer term. A B C D All 6.4 million buildings in the Netherlands have an indication of the foundation risk from A to D. A No risk B No risk, possibly sensitive C Light risk, possibly vulnerable D High risk, repair necessary C D 750,000 Households 240,000 Households 370,000 Homeowners A building can consist of multiple parts with different users (households or businesses) 1 2 3 120,000 Homeowners with foundation problems Scope of the research

Foundation Repair: Financiable for Homeowners? 5 ANALYSIS REPORT The estimate of the foundation repair challenge for these homeowners is €11 billion. Median For half of the individual homeowners with foundation problems, the costs for repair are more than €54,000. On average, the repair costs are €92,000. € 11 billion Repair Costs Not directly payable Not financiable via a loan Figures Over 75,000 homeowners cannot pay the costs for full foundation repair directly from their liquid assets (bank and savings balances and investments). Over 25,000 homeowners with foundation problems fall outside the standard mortgage financing space if they were to borrow the part of the repair costs they cannot pay directly. The repair costs vary greatly among homeowners. Total value-at-risk: €52 billion. Financiability Results Over 120,000 Homeowners with foundation problems 75,000 45,000 95,000 25,000 Homeowners with foundation problems x 1,000

ANALYSIS REPORT

1. Introduction 7 1.1 Background 7 1.2 Problem Analysis 8 1.3 Research Questions 9
2. Research Methodology 10 2.1 Research Design and Data 10 2.2 Risk Indication and Scope 10
3. Scale of Foundation Issues 12 3.1 From Building to Dwelling/Homeowner 12 3.2 Value-at-Risk 13 3.3 Repair Costs 14
4. Direct Affordability of Repair Costs 15
5. Possibility to Borrow for Repair Costs 17 5.1 Loan-to-Value 17 5.2 Loan-to-Income and Maximum Mortgage 18 5.3 Mortgage Financing Space 19
6. Conclusion 21 Literature 23 Table of Contents

Foundation Repair: Financiable for Homeowners? 7 ANALYSIS REPORT

1. Introduction 1.1 Background The Netherlands is struggling with foundation issues that will worsen without (preventive) measures, partly due to climate change. Damage to the foundation can cause small problems, such as cracks in walls and sticking doors. But it can also cause major problems, such as moisture, tilting, and risk of collapse.

Foundation repair can be very expensive and thus have major financial consequences for homeowners. It is also the case that foundation damage is not insurable. Homeowners must bear these costs themselves in principle, and it is questionable whether they have sufficient financial capacity for this. Delaying repair measures can worsen the problems and lead to higher repair costs, lower property value, and residual debt risks.

The goal of this research is to gain insight into the scale of the foundation repair and financing challenge for homeowners.

This research provides the following three insights: • We translate the foundation problems at the building level to the level of dwellings and the households living in them. This offers a more detailed picture of the scale of the foundation issue compared to earlier studies that only contained estimates of the number of buildings with foundation problems. • We address the estimated costs for foundation repair instead of the potential damage associated with foundation problems. This provides a substantiated picture of what is needed to solve foundation problems. • We map both the direct affordability and the financiability of foundation repair costs, specifically for the group of homeowners with (a high risk of) foundation damage. First, we compare the required repair costs against the financial capacity of homeowners. This is to determine to what extent the repair costs can be paid directly. Subsequently, we map to what extent homeowners could borrow the portion of repair costs they cannot pay directly within the standard mortgage financing space. This research makes clear - from the perspective of the individual homeowner - what the scale and financial impact of the foundation problems are.

The AFM previously highlighted the negative (financial) consequences resulting from insufficiently factoring in (pricing in) climate risks for home buyers and owners (see AFM, 2023): • Home buyers can pay too high a purchase price and obtain too high a loan amount for a property with foundation and flooding risks; • Homeowners can experience financial problems when they have no financing space to prevent or repair damage to their home; • Home buyers can come into unwanted contact with housing stress and health and safety risks arising from climate risks; • Home buyers and owners have little perspective for action due to lack of information and currently cannot take precautionary measures.

Foundation Repair: Financiable for Homeowners? 8 ANALYSIS REPORT 1.2 Problem Analysis Since the advisory report of the Council for Environment and Infrastructure (Rli, 2024) and the cabinet's response to it, the foundation issue has been on the societal agenda.

The Rli report provides an image of the nature and scale of the foundation issue, the causes, and the solutions.

Foundation damage is caused by factors such as low groundwater levels, soil subsidence, and soil uplift. Factors that are further exacerbated by the increase in dry periods under the influence of climate change.

Necessary foundation repair by homeowners lags behind due to a lack of i) information on whether they have or will have foundation problems and ii) perspective for action, partly because they cannot bear the repair costs. Additionally, foundation repair is hindered by other factors, such as execution capacity. Not repairing the foundation leads to harmful consequences for homeowners, such as deteriorated state of the foundation, higher risk of damage, higher costs for repair, decrease in property value, and unsafe situations (risk of collapse).

Information is missing First, reliable foundation risk information is missing for both current and future homeowners and other players in the home buying and selling process. In recent years, more has become known about the foundation issue, but there is still no structural and standardized information available. As a result, foundation damage currently plays hardly any role in pricing on the housing market (AFM, 2023). This also means a lack of perspective for action for current homeowners: you can do nothing if you don't know if there is a problem, what the problem exactly is, and how acute it is. Additionally, the risks and costs can be passed on by the selling party to the next owner who, especially if it is a first-time buyer, may have insufficient financial reserves.

Furthermore, homeowners do not always know who bears the costs for foundation repair and how high they are. Almost half of the homeowners do not know who must pay these costs in the event of (further) subsidence or other foundation problems, or expect that these costs will be paid by their insurer or by the government, province, and/or municipality (AFM Consumer Monitor, 2025). Over half of the homeowners understand that they (partly) themselves (or with the HOA) are in principle responsible for the repair and the associated costs. Furthermore, it appears that 4 out of 10 homeowners themselves have no idea how high the costs are for foundation repair (AFM Consumer Monitor, 2025). There is no (reliable) information available for homeowners regarding the financial consequences of foundation problems and the costs for repair. Homeowners cannot therefore make a decision on whether, when, and in what manner they should proceed with foundation repair.

The lack of knowledge about the state of the foundation and the availability of risk information is also evident in the AFM Consumer Monitor, 2025. Only 1 in 6 mortgage holders is fully aware of the type of foundation, the subsoil, the type of area, and the construction period (before or after 1970) of their home. The construction period is often known, but on its own provides little information about the type of foundation.

Mortgage holders usually assess foundation risks based on their own assessment of the situation and/or (the absence of) visible signals. In less than 1 in 10 mortgage holders, actual research has been done on the foundation of the home.

Research by Vereniging Eigen Huis indicates that 85% of people who own a house with a real risk of foundation damage were not aware of this at the time of purchase (see Rli, 2024). The state of the foundation is rarely mentioned in home advertisements. Selling homeowners have no financial interest in bringing foundation problems to light. Research shows that reported foundation damage leads to significant price discounts when selling a home; mentioning a repaired foundation leads to a slight increase in the selling price (see Hommes et al., 2023).

Foundation Repair: Financiable for Homeowners? 9 ANALYSIS REPORT Lack of perspective for action There are several practical reasons and bottlenecks why homeowners do not repair the foundation. For example, foundation repair within an apartment complex requires coordination within a homeowners' association (HOA) or with neighbors within a building block. Poor cooperation, inactive HOAs, and a focus on legal distribution of responsibility can hinder an effective approach (Rli, 2024). Additionally, there is a lack of perspective for action for the individual homeowner in certain cases, because the solution lies, for example, in groundwater management.

Furthermore, the high costs for foundation repair form a barrier to repairing the foundation if homeowners do not have enough money or borrowing capacity. Until now, it has been assumed that the costs for repair are either too high for homeowners or that they would have sufficient financing space, but this has not been investigated before. However, there are rough estimates that 25% of buildings require 'very major work' (estimated costs €120,000), 35% of buildings require 'major work' (estimated costs €60,000), and 40% of buildings require 'limited work' (estimated costs €30,000) (Rli & Deltares, 2024).

1.3 Research Questions This research makes clear which homeowners exactly are dealing with foundation problems, what the repair costs are at the dwelling level, and to what extent these costs can be borne by the affected homeowners. We answer the following main and sub-questions.

To what extent are owners of homes with foundation problems able to bear the repair costs? • What is the scale of the foundation issue when looking at the type of buildings (residential or commercial buildings)? What is the value-at-risk (WOZ value) and remaining mortgage debt of the buildings with foundation problems? • Which households have foundation problems? Are these homeowners or tenants? • What is the financial position of homeowners with foundation problems? And what are the characteristics of this group? • What are the estimated foundation repair costs per homeowner for the dwelling? • How many homeowners are able to pay the costs for repair themselves? And what characterizes this group? • What is the effect of including the repair costs on the mortgage financing space of homeowners, both for loan-to-value and loan-to-income? What are the characteristics of homeowners who fall outside the standard mortgage financing space?

Foundation Repair: Financiable for Homeowners? 10 ANALYSIS REPORT 2. Research Methodology 1 We use data from 2023. For a small part of the research population, data on repair costs, WOZ value, or assets are missing. This causes these homeowners to fall outside certain analyses of Chapters 3-5. 2.1 Research Design and Data This research combines building-specific foundation data from the FunderMaps application of the Knowledge Center for Addressing Foundation Issues (KCAF) with detailed administrative data at the household level from the Netherlands Bureau for Economic Policy Analysis (CBS Microdata). The goal is to determine for which homeowners foundation risks play a role and to what extent the repair costs are bearable for them. The risk model of FunderMaps contains information per building in the Netherlands about the foundation risk, as well as an estimate of the required repair costs. We link this to income and asset data from CBS Microdata to determine which households live in these buildings and what their financial capacity and financing space is.1 The separate technical appendix provides a more extensive explanation of the research design and data.

FunderMaps assigns a risk label to each building in the Netherlands and provides an estimate of repair costs for buildings with the highest risk labels. This information is based on a risk model that uses historical and current data on subsoil, foundation type, groundwater levels, archive information, and, where available, foundation research. Currently, there is no complete national coverage of foundation information; this model provides the best possible approximation of the current situation. The repair costs at the building level are calculated based on the type of foundation, surface area, and regional cost prices for foundation repair. It is good to note here that these are repair costs to fully restore the foundation. In some cases, it may be possible to extend the lifespan of the foundation with cheaper methods without full repair, but then the risk may resurface in the long term. If a building consists of multiple apartments or other parts such as commercial spaces, we have converted the repair costs at the building level to repair costs per homeowner. Here we assume that all (type) users within a building share proportionally in the costs for foundation repair. For example: in a building with 7 'residential units' (2 shops, 3 rental apartments, and 2 owner-occupied apartments), we assume that each residential unit bears 1/7th of the repair costs of the entire building.