News item | 27-02-2023 | 3:30 pm
To ensure that tenants pay a fair price for their home, the cabinet wants to regulate the mid-market rent and make the housing valuation system (WWS) mandatory. Rents in the private sector have risen excessively in recent years. In the past 5 years, new tenants in the 4 major cities paid € 160 per month more than the previous tenants. In the same period, more than 75,000 affordable owner-occupied homes were purchased for rental, making them no longer available to first-time buyers or people with a middle income. The law and the WWS ensure that the rents are in proportion to the quality of the home. Landlords are obliged to adhere to the maximum rents. These measures will reduce the rental price of more than 300,000 homes by an average of € 190 per month.
The law focuses on 4 goals: more affordable rental homes, better protection for tenants, making homes more sustainable and continuing willingness to invest in new construction. The law will go into consultation today and is expected to be presented to the House of Representatives this autumn.
Hugo de Jonge, Minister for Housing and Spatial Planning: “Many tenants pay the top price for a home that is really not worth it. Tenants often have no choice and have their backs against the wall. More and more homes have become inaccessible for people with a middle income. With the Affordable Rent Act we protect tenants, we ensure that a fair rent is guaranteed and renting becomes affordable again for people with an ordinary income.”
Maximum rent
Due to the expansion of the WWS and a maximum annual rent increase (average collective labor agreement wage increase + 0.5%), tenants with a middle income will receive better rent protection. The WWS already exists for the lower rental segment. These are homes up to approximately 145 points, often social rental homes. With the expansion of the points system, rent protection will apply to homes up to and including 186 points (1). The regulation of mid-market rental properties applies to new rental contracts and as long as there is a shortage in the housing market. The need for regulation is evaluated every five years.
By making the WWS mandatory, landlords are obliged to adhere to the maximum rent. This is necessary because currently more than 50% of the private rented homes (2) to which the WWS already applies are rented out too expensive. Municipalities will be responsible for supervision and enforcement. Landlords will soon risk an administrative fine if they charge too high a rent. The position of tenants themselves will also be strengthened: with the new law, they can still go to the Rent Assessment Committee after 6 months. Making the WWS mandatory is permanent.
(1) 186 points currently corresponds to € 1,021.02. The price for this number of points is indexed annually with inflation and will amount to € 1,123.13 when the law comes into force.
(2) Homes with a quality of up to 145 points under the WWS.
Extra impulse for sustainability
The WWS has also been modernized to boost the quality and sustainability of the homes. A sustainable home with energy label A or higher receives extra points, while energy label E or lower results in points being deducted. This increases the price difference between homes with a good and a bad energy label and promotes the sustainability of rental homes. Landlords with a good energy label can ask for a higher rent and tenants benefit from a lower energy bill. The government is also adjusting the valuation of the outdoor space, so that a roof terrace of 20 square meters earns more points than a balcony of 4 square meters. As a result, the system is more in line with the homes that are now being delivered and the quality valued by tenants. Finally, the maximization of the WOZ value will apply from 187 points instead of the current 142 points, so that homes cannot end up in the free sector solely due to a high WOZ value.
New construction
The law will soon apply to both existing and new construction. Housing associations, institutional investors and developers want to build a total of 100,000 mid-market rental homes by 2030. It is important that the regulation does not delay current new construction projects. That is why a surcharge is being introduced for new-build homes still to be delivered, amounting to 5% of the maximum rent up to 10 years after completion. This applies to mid-market rental properties that are completed after 1 January 2024 and where construction has started before 1 January 2025.
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