Real estate investors are unhappy at the cabinet’s plan to tackle a potential ‘explosion’ in private sector housing rents, saying it could make the sector unprofitable, given other measures the government is introducing.

‘If this continues, then it will be very difficult for a landlord to make a profit on a rental home, and we should take into account that a lot of rental properties will be sold off,’ Arnoud Vlak, director of property investor lobby group Vastgoed Belang told the Financieele Dagblad.

Last year, landlords operating in the non rent-controlled sector agreed to limit rent rises to the rate of inflation from the previous year plus 1%.

However, housing minister Hugo de Jonge said on Monday that this could lead to problems for tenants, given the soaring rate of inflation, especially when coupled with higher energy bills.

Instead the minister plans to set a maximum increase for so-called free sector rents – properties which are more expensive than the €763 per month social housing sector limit. He already has this right for social housing.

The government earlier increased the property transfer tax for private landlords to 9% and agreed that next year, they will pay more tax on the value of their properties.

Together, the measures mean that landlords are now considering whether or not to continue, Vlak said. ‘And that means there will be fewer non-rent controlled properties, not more,’ he told the paper.

The government has pledged to increase the number of properties for rent outside the social housing sector, particularly mid-market rentals of up to €1,000 per month. Currently, 57% of the Dutch housing stock is owner occupied, 33% is rent controlled and just 9% is available for higher earners who wish to rent.