Private investors sold nearly 16,400 rental homes in the Netherlands in the second quarter of this year, 42% more than in the same period last year, land registry office Kadaster said on Thursday.

It is the first time since records began in 2010 that the total number of privately owned rental homes has fallen, the agency said in a new report.

At the same time, investors bought only 7,800 rental properties, almost half as many as they sold, and most of which were large properties. The result, the Kadaster said, is a net loss of more than 8,500 homes in the private rental sector.

In addition, more than 2,000 second homes were sold to owner-occupiers in the past quarter.

Much of the turnover in the sector involves investors selling to each other, but experts warn many of those homes are being sold once tenants move out. Properties in vacant condition can fetch 20% to 40% more than rented homes, making the strategy highly profitable.

The trend follows the introduction of new affordable housing legislation which brought hundreds of thousands of homes under stricter rent controls. The law was meant to expand the middle rental segment, but landlords say it has had the opposite effect by pushing investors out of the market.

“Stacked government measures are having disastrous consequences for the housing market,” home owners organisation Vastgoed Belang told news website Nu.nl. “People who don’t qualify for social housing or a mortgage and depend on the private rental sector now have almost nowhere to go.”

Kadaster housing market expert Matthieu Zuidema told Nu.nl  the law has had “a major impact” on investor behaviour.

The shift has created opportunities for first time buyers, who are picking up smaller former rental homes, especially in big cities such as Amsterdam. In the capital,  two in five transactions now involve ex-rental properties.

ING housing economist Sander Burgers sold Nu.nl the impact is uneven. “The shift from rental to owner-occupied homes is largely the result of government measures that make renting less attractive,” he said.

Pressure

“Every sector of the housing market is under pressure – social housing has long waiting lists, private rentals are scarce and expensive, and owner-occupied homes are being sold at record speed.”

In some cases homes are ending up with fewer occupants than before. “Instead of three students renting, you may now see two buyers living there. If that pattern is confirmed, the sell-off could even worsen the housing shortage.”

There are some 8.2 million homes in the Netherlands and over 60% are lived in by their owners. Housing corporations own a further 30% and the rest is in the hands of investors, both institutional and small landlords with one or two homes.