CBS: strongest rent increase in eight years last year

Not only groceries, electricity and petrol are becoming more expensive, but also renting a home. Rents have increased by an average of 3 percent in the past twelve months. That was the strongest increase since 2014, calculated the CBS statistics after the annual rent increase on 1 July.

It is not surprising that rents have increased more than a year ago. In 2021 they were frozen by order of the government due to the corona crisis. Rent increases were only possible if new tenants moved into a house.

“But rents also rose more than in previous years,” says Peter Hein van Mulligen, chief economist at CBS. Since 2017, they have been increasing each year: from an average of 1.9 percent (2017), to 2.5 percent (2019), and now 3 percent.

Social rental housing is subject to stricter rules and the rent increase there was therefore lower than for private sector homes: an average of 2.6 percent versus 3.8 percent. And, unsurprisingly, rents rose the fastest in Amsterdam, at an average of 3.6 percent.

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In the capital, all housing associations took advantage of the new option of introducing an income-related rent increase of 50 or 100 euros per month for social tenants with a high middle income, wrote The watchword earlier. While according to Aedes, the umbrella organization of housing associations, nationally ‘only’ 40 percent of the housing associations did this.

The lowest average rent increase was in Friesland and Drenthe: 2.5 percent.

Inflation

Housing costs, including rents, are a significant factor in the calculation of inflation, says Van Mulligen. “For more than 20 percent.” This almost always puts pressure on inflation, because rents generally rise less rapidly than other costs. But because rents rose by only 0.8 percent last year, and now suddenly a lot more, that effect is less pronounced. Van Mulligen: “The rents are pushing inflation down less than usual.”

The fact that an increasing proportion of tenants’ income goes to housing was also recently shown by the Housing Survey 2021, a three-yearly survey by Statistics Netherlands. First-time tenants lost an average of 36.5 percent of their income on rent last year. Private tenants even 42 percent, if costs for gas and electricity are also included – and that was before the enormous price increases.

Housing associations are signaling an increase in the number of tenants with payment arrears in the first months of this year, according to Aedes. This while the number of arrears and evictions has been declining for years.

“The affordability of housing is an increasing problem for tenants,” says Marcel Trip of the Woonbond. “We are calling for something to be done about it.”

Wage development

The Woonbond wants the cabinet to bring forward the proposed rent reduction for low incomes by one year from 2024. As a result, half a million households will pay 57 euros less per month. Minister Hugo de Jonge (Public Housing and Spatial Planning, CDA) has promised to explore whether this is technically possible.

The cabinet’s plans to restore purchasing power, leaked this week, show that the housing benefit is being increased. How and by how much is unknown. It was previously announced that the maximum rent increase for social housing from next year is no longer linked to inflation, but to the collective labor agreement wage development. Rents may then rise by half a percent less than the average collective labor agreement wage increase.