News item | 22-12-2023 | 10:55
Rents in the regulated sector may increase by a maximum of 5.8% from 1 July 2024.
This percentage is equal to the average wage increase from December 2022 to December 2023 (CBS). Corporations are allowed to increase rents by an average of 5.3%. For tenants of a housing association home, this means that the income increases on average more than the rent increases. This is part of the agreements that the cabinet has made to keep rents affordable. Rent allowance recipients are largely reimbursed for the rent increase through the rent allowance, which also increases with higher rent.
Rent follows wage development
In the regulated sector, the permitted maximum rent increase will be linked to wage development in the period 2022-2025. This was agreed for the regulated rental segment in June 2022 National Performance Agreements between Minister Hugo de Jonge and Aedes, the Woonbond and the VNG.
Due to this agreement, the rent increases after most tenants have also seen their income increase. The rent increase is no longer linked to inflation. In the first year of the National Performance Agreements (2023), this meant a limited maximum rent increase of 3.1%, while inflation rose by almost 10% in 2022.
The maximum rent increase applies to various homes in the social sector such as independent homes, studios, apartments and rooms. It also applies to caravans and pitches. It does not matter whether the landlord is a housing association or private landlord.
Realized rent increase
For tenants at corporations, the rent will rise less on average than the individual maximum of 5.8%. This is because housing associations are not allowed to propose the maximum annual rent increase of 5.8% for all their homes. For them, the maximum rent increase (maximum average rent increase over their home ownership) is equal to the wage development, minus 0.5%. That is 5.3% for 2024. This was agreed to improve the affordability of rents for tenants with the lowest incomes. They will pay a lower amount of rent compared to their income.
In 2023, landlords in the regulated sector were allowed to increase rents by a maximum of 3.1%. The realized rent increase was still more than 2 percentage points below this (on average 0.5%, for the entire rental sector). In other words: a difference of more than 9 percentage points compared to inflation in that year. In the housing association sector, rents only rose by 0.1%. This was mainly due to the rent reduction to €575 for approximately 600,000 households.
Keeping rents affordable
That is the commitment of this government. Since 2022, various measures have been taken to keep rents affordable and improve the position of tenants. The most important are the cap on annual rent increases in the regulated and free sector. The one-off rent reduction in the regulated sector in 2023 also helps keep rents affordable and resulted in a rent reduction from an average of €59 to €575 per month.
Tenants with a lower income are supported in paying their housing costs through housing allowance. Since 2023, the rental allowance – in addition to the annual indexation – has been structurally increased. By €16 in 2023 and the Senate recently agreed to an increase of more than €30 in 2024. The increase in the rental allowance supports the purchasing power of tenants.
Higher incomes and private sector
In some cases, a tenant in the regulated sector may receive a slightly higher rent increase. For example, if he rents an independent home and has a higher income.
Furthermore, Minister De Jonge announced last week that rents in the private sector may increase by a maximum of 5.5% until May 1, 2024. That is equal to the inflation December 2022-December 2023 + 1 percentage point. Before May 2021, there was no limit to annual increases in the private sector. Because this limit was missing and due to the scarcity on the housing market, tenants were sometimes confronted with large rent increases.
The law regulating the cap will expire on May 1, 2024. Minister Hugo de Jonge is working on a proposal to protect tenants in the private sector against high rental price increases from 1 May 2024.
Read more: