EU response to COVID-19 Mortgage Crisis

December 13, 2020
Antonio Flores

Land use has changed dramatically in places around the globe in the wake of the COVID-19 pandemic. Apartments, which formerly received high prices because they were near jobs and entertainment, now find themselves without a justification for their prices, especially as their amenities are also closed for months. Offices are going unused, as corporations switch to work-from-home policies. But another crisis is on the demand side: as millions of people were left without work for months, they found themselves unable to pay the rent or mortgage. Because of this, governments have had to make major policy adjustments to deal with the crisis, to prevent huge numbers of evictions this year. Local governments across the EU have had varying responses to the mortgage-related fallout of the pandemic, lockdown, and associated economic problems, ranging from, on the more lenient side, very little public assistance, to total rent freezes on the other extreme. 

In the EU, a massive relief package was passed which gave 1.1 trillion euros in large grants and loans to various countries. This was very controversial due to the fact that the hardest hit countries in Europe were poorer Mediterranean countries which would contribute less money towards the the reconstruction of the continent. In addition, more locally in the Netherlands, the mortgage tax relief system is known as very generous. It was in the process of being cut, but COVID-19 has forced reduction in the cuts to the relief system. 

The most extreme moves have been eviction and rent freezes upon landlords, who often rely on renters to pay their own mortgages. In many places like the cities of Berlin and London, there are rent freezes. The Spanish region of Catalonia is even more extreme, as the governor is a former squatter’s rights activist. Due to the number of evictions after the economic crash, the number of squatters has dramatically increased, and if the squatter goes undetected for 48 hours, the squatter can only be prosecuted in civil court and their cases can be appealed, often taking months or years to evict. This makes good property security a necessity for landlords, who find themselves having to constantly hire guards and buy security systems to keep intruders out.

Governments across Europe have played a major role over the past ten months in dealing with the mortgage and eviction crisis in their countries. There have been a range of measures taken by officials, both more moderate and more extreme. 

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