The two coalition parties have developed a plan to stimulate housing corporations and developers to build more rental properties in order to slash waiting lists and meet the needs of the growing urban populations.

The plan would give housing corporations more leeway to build homes with rents of up to €600 a month while investors will be encouraged to convert empty offices to more expensive apartments and studios.

In return, they will be exempt from a special tax on rent paid by major landlords for a five year period, the two parties say.

‘In the big cities, there is a lot of demand from young professionals who want a studio with all sorts of expensive provisions such as a luxury kitchen,’ VVD parliamentarian Ronald van der Linde told broadcaster Nos.

‘The waiting lists for social housing are still too long,’ said Labour MP Jacques Monasch. He wants to help youngsters start on the housing ladder and stimulate employment in the construction sector.

The two parties plan to submit their plan to parliament on Wednesday, when the housing ministry’s budget is being debated.