Tuesday 05 July 2022

Increasing rent controlled sector may hit housing supply: landlords

Photo: DutchNews.nl

Developers and investors have given a mixed response to the government’s decision to expand the rent controlled housing sector in the Netherlands so that, according to some estimates, 90% of Dutch housing stock is covered.

Housing minister Hugo de Jonge said the aim is to tackle high rents in a sector in which ‘the shortage of housing does not always bring out the best in landlords’.

De Jonge is planning to expand rent controls from housing cost less than €763 a month to €1,000 or possibly €1,250. Maximum rents are then determined by a system of points, based on size, amenities and extras such as a luxury kitchen.

Private landlords lobby group Vastgoed Belang said in a reaction that small landlords will now be more likely to sell their properties, further reducing the number of homes for rent. ‘These measures mean rental income will no longer be in proportion to the costs,’ chairman Jack de Vries told the Financieele Dagblad.

Around one fifth of the 640,000 homes currently outside the rent-controlled sector cost more than €1,000 a month to rent.

Big investors

Norwegian landlord Heimstaden, which owns 13,500 rental properties in the Netherlands, said it was extremely concerned about the increased regulation. A spokesman told the FD that the change could hit plans for new developments and make it unprofitable to invest in making existing properties more energy efficient.

Long term

Institutional real estate investment lobby group IVBN said it ‘can live’ with increased regulation, as long as ‘market rents are guaranteed and that we know where we are in the long term’.

New homes must be built at market prices and then rented out,’ the IVBN said. If the investment climate deteriorates, there is a risk that less will be built and that is in nobody’s interest.’

Tenants’ union Woonbond said De Jonge’s plans are a step in the right direction but would like to see the upper limit extended to €1,350, so that even more homes fall into the regulated sector.

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