Why property foundations matter more in the Netherlands than other countries

For many expats, buying a home in the Netherlands is an exciting milestone. Yet one topic often raises questions later in the process: the property's foundation. 

In many countries, foundations are rarely discussed when buying a home. In the Netherlands, however, they play a much larger role, especially since a new regulation came into effect on April 1, 2026, making foundation risks a formal part of property valuations and mortgage applications.

Common foundation types in the Dutch housing market

The reason foundations matter so much in the Netherlands lies beneath the surface, literally… Large parts of the country are built on soft soil, such as peat and clay. Over time, this has led to several different foundation methods, each with its own characteristics and risks.

Wooden pile foundations

Many older homes, especially those built before the 1970s in historic city centres, rest on wooden pile foundations. These wooden piles can last for centuries, provided they remain permanently submerged in groundwater. Problems arise when groundwater levels drop, exposing the wood to air. This can cause decay, often referred to as pile rot, which may lead to settlement over time. 

Concrete pile foundations

Newer homes are more likely to be built on concrete pile foundations. These are far more resistant to changes in groundwater levels and are generally considered stable and durable. As a result, concrete pile foundations are usually associated with lower long-term risk. 

Shallow foundations

Another common method is the shallow foundation, known in Dutch as fundering op staal. Instead of being supported by piles, the building rests directly on the soil. Whether this poses a risk depends heavily on local conditions. In areas with stable ground, it can perform well, but in regions with peat or clay, shallow foundations can be more sensitive to soil movement and groundwater fluctuations. 

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New foundation regulations as of April 1, 2026

Due to growing awareness of foundation-related risks, Dutch valuation standards have been updated. From April 1, 2026, appraisers are required to include a foundation risk label in every official valuation report used for mortgage purposes.

This label is based on data from the Knowledge Centre for Tackling Foundation Issues (KCAF) and provides a standardised risk classification ranging from A to E.

Labels A, B and C

Labels A, B and C indicate no risk, low risk, or increased but uncertain risk. For these categories, no immediate action is required, and mortgage applications usually proceed as normal. 

Labels D & E

Labels D and E indicate a high risk or a confirmed foundation issue. In those cases, an additional foundation investigation is required before the valuation report can be completed. 

Understanding the costs of foundation issues

A higher foundation risk label does not automatically mean that a property is unsafe or unsellable. It does, however, introduce an additional step in the process.

If further investigation shows that the actual risk is limited, lenders generally make no changes to the mortgage terms. If the investigation identifies a higher or confirmed risk, the financial implications can be more significant.

In those situations, banks may adjust the maximum mortgage amount, require part of the loan to be placed in a repair escrow, or take expected repair costs into account when assessing affordability. Importantly, foundation repairs are not covered by home insurance in the Netherlands.

How foundation labels affect mortgage applications

For expats, this development can be unexpected. In many countries, foundation issues rarely affect financing decisions. In the Netherlands, foundation risk has now become a formal element of the valuation and mortgage assessment process.

Because the foundation label only becomes available once a valuation has been carried out, usually after an offer is accepted, it is important to consider foundation risk early. Understanding the type of foundation and the local soil conditions before bidding can help avoid surprises later in the process.

What this means for the future of property buying in the Netherlands 

The introduction of the foundation risk label marks an important shift in the Dutch housing market. It adds transparency and ensures buyers are better informed about a uniquely Dutch risk that might otherwise go unnoticed.

Foundations may be out of sight, but they are no longer out of mind. Understanding how they work and how they affect property values and mortgages helps expats make better-informed decisions when buying a home in the Netherlands.