Free sector rents should not rise much faster than wages next year

Wage development, instead of inflation, will determine how much rents in the free sector may rise from next year. In this way, the Cabinet wants to prevent tenants from being faced with a double-digit rent increase next year due to the sky-high inflation of recent months. The change will affect approximately 648,000 homes.

At the moment, rents in the free sector may be increased annually with inflation plus 1 percent. This offered tenants sufficient protection in recent years, when the average price level rose by an average of 2.3 percent. But since November last year, inflation has risen sharply.

Life became almost 15 percent more expensive last month, according to statistics agency CBS. That makes this amendment to the law, which was announced just before the summer but has now actually been submitted to the Tweede Kamer, all the more urgent.

From next year, instead of looking at inflation, the average development of collectively negotiated wages will be looked at. This will be determined in December on the basis of figures from Statistics Netherlands. In this way, the law offers tenants better protection in times of extremely high inflation, said Minister Hugo de Jonge (Public Housing).

"Living must remain affordable," De Jonge said. "If the rent rises much faster than the income, people can get into serious problems. We don't want people to end up on the street or that they can hardly get by because of housing costs that are too high."

The Woonbond is happy that inflation will not determine the annual rent increase next year, but the union is not yet completely satisfied. The national tenants' association would have preferred a maximum rent increase below the average collective labor agreement wage increase. "This still offers room for income and rental expenditure to grow further apart due to excessive rent increases. While for many households this 'housing gap' is already too large," the union said.