Rental housing stock declines for first time since 2010 as landlord sell-off continues

Landlords are still selling off their rental properties. The number of rental properties on the market declined for the first time since 2010, when the Land Registry began recording this data, NOS and ANP report based on the agency’s second-quarter figures. The figures do not cover housing corporation properties, but all other rentals.

Investors sold more homes than they bought or built. In the second quarter, investors sold 16,370 rental properties into the owner-occupied market, over 42 percent more than a year earlier. They purchased only 7,800.

“The number of sales has been increasing for some time,” said Matthieu Zuidema, a housing market expert at the Land Registry, according to NOS. “But it is striking that the number remains so high, and there are several explanations for this.”

A big reason for the sell-off is the Affordable Rent Act, which regulates rents for mid-level rental properties based on the points system that also applies to social housing. In practice, this lowered rental income for many landlords. “When investors receive less income, it can lead to more sales,” Zuidema said.

Other tax rules also impacted landlords’ income. “A higher transfer tax and purchase protection were also introduced earlier. New rules for box 3 tax are also being introduced. Investing in residential properties is becoming less and less attractive, particularly for private investors.”

Most of the homes investors are still buying are larger properties. The floor area determines a large part of the rent, making larger homes more likely to fall under the private sector. “And in the private sector, there are no rules for maximum rent,” Zuidema said. Over 80 percent of homes bought by landlords in the second quarter had a floor area of more than 95 square meters.

And most of the properties sold are smaller properties for the same reason. “These small homes used to be rented out for very high rents, often to tenants with few alternatives, and these regulations now make that more difficult.”

According to Zuidema, the Affordable Rent Act has been effective for first-time buyers looking for small, cheaper homes. “The downside is that there’s now less space for tenants.”