On Monday, July 1, the Affordable Rent Act comes into effect, aiming to reduce rental prices in the middle and social housing sectors. While the intention is clear, property owners are bracing for the impact of these new regulations.
One of the key components of the new law is the expansion of the points system that determines the maximum rental price. The system will now apply to homes with up to 186 points, which equated to approximately €1100 earlier this year. However, the change will only affect new rental contracts, meaning it might take some time before the full impact is felt across the sector.
New rules extend rent controls to approximately 90% of Dutch rental properties. If you are a tenant or planning to move to a new rental home, what do the changes mean for you?
€uros & points: Understanding your rent with the points system
In the Netherlands, rent prices are based on a points system that considers factors like the size of your place, its official value, amenities offered, fancy features, energy efficiency, and even outdoor space. To get started, you can find your property’s official value (WOZ waarde) online.
The Rent Tribunal (Huurcommissie) is launching a tool to estimate your rental property’s point value under the new system coming July 1st. This point system determines the maximum rent allowed. If your place scores 143 points or less, the maximum rent shouldn’t exceed €880 (excluding service costs). If you’re paying more, you might be eligible for a rent reduction. Properties with 144-186 points fall under a mid-range category with rent caps as well. Anything above 186 points is considered “free sector,” where landlords can set their own prices.
Landlords cash out, rental supply predicted to shrink
Otto de Gries from property management firm 050Vastgoed anticipates that the effects will be seen quickly. “We noticed landlords were more inclined to sell their properties when a tenant moved out, anticipating the new law,” he said. This trend is influenced by the current strong sales market where properties fetch high prices, unlike the rental market. “We expect the rental supply to decrease,” he added.
Despite the expected decrease in availability, De Gries believes the quality of available rental homes will improve. “Properties will need to meet more criteria to earn higher points, such as sustainability. Landlords will need to invest more to remain competitive, which benefits tenants, particularly students.”
High rent? Low score? You might get relief!
If you already live in a rented house or apartment, and the property is worth 143 points or less but you are paying more than €880 in rent, you may be entitled to a lower rent. Talk first to your landlord. If your home is worth more than 143 points, you must continue to pay the rent you agreed with your landlord unless you moved in less than six months ago, in which case you can ask for a reduction.
Rental prices will now depend significantly on the sustainability of the property. “However, it’s not always feasible to make a home more sustainable. In such cases, it makes more sense to sell rather than rent it out again. We’re already seeing many sales, and this will likely increase,” explained Kariem Deelstra of Gruno Vastgoed.
If you reside in a shared accommodation without a private entrance, specific regulations apply to you. You can assess the points allocated to your room here. If your rent exceeds the stipulated maximum, it is advisable to discuss the issue with your landlord initially. Rooms must be leased under individual contracts and are subject to social housing regulations.
No more guesswork! New law caps rent based on your home’s score
For those signing a new rental contract on or after July 1, your new landlord is required by law to tell you how many points your property is worth and therefore the maximum rent. Given the legislation is being implemented very quickly, landlords have until January 1, 2025, to do this. If the property is worth up to 186 points but you are paying more than €1,157 a month, you will be able to get it reduced to the legal maximum.
The points assigned to each property will be documented in the rental contract, ensuring transparency for tenants. The aim is for tenants and landlords to discuss rental agreements before resorting to legal action.
If your rent is too high, start by talking to your landlord and asking for a rent cut. The landlord may send in a formal assessment company to carry out a detailed check of the points, which will involve measuring the space you live in, the luxuriousness of your bathroom, the energy label, and the outside space. If you cannot reach a deal with your landlord, you will need to take your case to the Rent Tribunal. The tribunal’s findings are binding, and both you and the landlord must adhere to them.
You can also report your landlord to your local authority. From January 1, councils can fine landlords who do not stick to the rules, but they have six months grace from July 1 to get their houses in order. Check out your local authority hotline.
Municipalities will be responsible for enforcing the new system, but this will not start until January 1, 2025, giving them time to prepare for their new role.
Goodbye, two-year blues! New leases mean more stability for tenants
The maximum rent increase for social housing this year is 5.8%, and for everything worth over 143 points, the maximum increase is 5.5%. Landlords can increase the rent once a year.
The government has also decided that all rental contracts should be permanent, apart from in a few special situations. This means landlords can no longer give tenants two-year contracts without a very good reason, stopping them from hiking rents enormously or telling tenants to leave every time a two-year contract ends.
