The government’s decision to freeze social housing rents is likely to cause financial problems for at least half of the country’s 262 housing corporations, according to guarantee fund WSW.

The WSW, which provides bank guarantees for housing corporations investing in new homes, said it expects the freeze will affect 140 providers over the next five years.

The government plans to freeze rents on properties currently costing less than €900 a month for the next two years. This will reduce income for housing corporations, which have pledged to build thousands of new social housing units. The Netherlands is currently short of around 400,000 homes.

“Housing corporations will be able to borrow less because they miss income,” the WSW said. “Then they can invest less in new build, in renovation and in energy-efficiency measures.”

The plan to freeze rents was drawn up by the leaders of the four coalition parties, not housing minister Mona Keijzer. She has said she would have preferred it if a “different decision” had been taken.

Most social housing in the Netherlands is provided by housing corporations.