Rent regulation didn't trigger mass sell-off, decreased rent a bit, large landlords say

Large landlords, who together own many tens of thousands of rental properties in the Netherlands, said that the Affordable Rent Act only impacted their rents to a very limited extent. The law, therefore, also did not trigger a mass sell-off of rental homes as it did among smaller, private investors, NOS reports.

Since July 1, the Netherlands has been regulating mid-priced rentals that used to fall in the private sector. They now fall under the same points system that applies to social housing. A maximum rent of 1,158 euros applies to new contracts based on what the home has to offer. Many private landlords are selling their rentals as soon as the tenant leaves, saying that the rental income is too low after rent regulation took effect.

But large investors have a different view on this, NOS found.

“We have concluded about 30 new rental agreements in the regulated mid-rental segment,” Vesteda, with about 28,000 rental homes, told the broadcaster. “The old rent was already below the maximum rent, so rents were not reduced.” Vesteda is not out for “rent maximization,” the investor said. “In about 5 percent of our homes, the rent for the new contracts must be reduced by an average of around 90 euros, especially in the large cities. The effect will be palpable there.”

Vesteda, therefore, also does not plan to sell off its rentals. The situation hasn’t changed for the investor. “Our starting point is that we rent out vacant properties again, but of course, we also sell. That number is expected to be higher than in recent years (2022: 157, 2023: 149). But it is still less than a few percent of our portfolio.”

The broadcaster heard similar accounts from other large landlords. Achmea Real Estate (27,000 homes) said the law resulted in only 0.4 percent less rental income. “For a rent of 1,00 euros, that is 4 euros.” A small number of less sustainable smaller homes in the four large cities will receive lower rents, Achmea expects. “Vacated homes are, in principle, rented out again,” Acmea said. “The Affordable Rent Act has no impact on the ratio between reletting and selling.”

Greystar (5,000 homes) had to lower the rent “by a maximum of 100 euros” in “some individual cases,” director Reinier Bunnik said. Greystar won’t sell any homes. “We are in it as a long-term investment.” ASR (5,500 homes) expects a limited impact and has no concrete plans to sell off properties that become free. BPD Housing (1,400 homes) says the law has no negative impact on rents. The company plans to buy more rental homes, not sell them off.

Bouwinvest (19,000 homes) will have to reduce the rents of around 875 homes when they get a new contract. “This low number emphasizes our commitment to charging reasonable rents. We invest for the long term, but sometimes, we sell housing projects. But the Affordable Rent Act is, in principle, no reason to sell.”

Amvest (22,000) could not yet provide insight into possible rent reductions, but did tell NOS that its “sales policy will not change based on this law.”

One landlord is getting rid of its rental properties - Heimstaden (13,000 homes). “The average rent for a home in the middle segment has fallen by 77 euros, from 1,022 to 945 euros,” Edward Touw of Heimstaden told the broadcaster. “This may not seem like much, but it is a decrease of about 7.5 percent in rental income. Landlords usually aim for a return of 4.5 to 5 percent, and with this decrease, that is no longer possible for those properties.” Heimstaden, a Swedish company active in the Netherlands since 2018, plans to sell 90 percent of its rentals as they become available.

The Dutch housing market roughly consists of two types of landlords - larger commercial housing investors and private individuals who rent out houses. In 2023, large landlords had approximately 385,000 rental properties, and private landlords had around 557,000.