New changes on the Dutch housing market

As you might have learned through the media, some changes are coming for the Dutch housing market. Senators voted in favour of legislation that will extend rent controls to cover most of the Netherlands’ rental property market from July 1st.

The legislation will affect all new rental contracts signed from July 1 as well as some older contracts. Landlords will be required by law to tell tenants how many “points” their property is worth. All properties worth 186 points or less will then fall under rent controls when there is a new tenancy. An apartment worth a maximum of 186 points can then cost no more than €1,157.95 a month in rent.

Properties that are worth under 143 points are considered to be social housing and if tenants are currently paying more than the maximum rent of €880, they will be able to request a discount, no matter how long they have lived there.

Points are awarded for amenities such as the number of bedrooms, whether or not the apartment has luxury bathroom fittings and the age of the property. The point system has also been overhauled to give more weight to high energy labels, outside space, and the quality of kitchens and bathrooms.

Landlords have until January 2025 to ensure that their tenants know how many points their home is worth. If the property is worth less than 186 points and tenants are being overcharged, they can take action to have the rent lowered if the tenancy is new. The rules also apply to student rooms, shared housing and property owned by private owners.

For new contracts it’s not possible to exactly predict what will happen to the housing market. Those against these changes have different expectations/calculations than those for.

In favor

The ministry of housing expects that this law will mean over 300.000 homes will see a rent reduction of on average 190 EUR a month. While they expect that some landlords will decide to sell their property this is perceived as a way to add more housing to the buying market to help starters to buy a house.

Against

The concern is two fold, the main and most straightforward concern is that renting out a property will not be as profitable, selling might become the better option. By selling the rental market is effectively shrinking meaning less housing will be available for rent.

Additionally, a divide is expected between the new social/middle segment (anything up to 186 points) and the new higher segment. The 186 point housing is capped €1,157.95 but there is no cap on anything over this. With the scarcity expected because of landlords selling their properties, people who would want to search in the 186 point segment can not find a house. They will be forced to look into the over 186 segment which is uncapped and therefore very high rents can be asked.

As developments arise we will of course share developments and more importantly look at each individual case for your employees to assist them in the best way possible.

Should any questions arise please feel free to reach out.

Sources : https://www.dutchnews.nl/2024/06/senators-say-yes-to-expanding-rent-controls-from-july-1/