Approval of new rent law: impact and prospects

On Thursday 25 April, the House of Representatives approved the Affordable Rent Act, aiming to have the new law come into force on 1 July 2024. However, its final implementation depends on several factors, including the Senate’s consideration of the bill. The Affordable Rent Act is an initiative of outgoing minister Hugo de Jonge, aiming to protect tenants who currently pay too much for their homes. This article will discuss the intended changes and their possible consequences.

New points system

There are two categories of rental properties: social rent and free sector rent. Currently, social rent has a capped rent, while landlords in the free sector are basically free to set their rents.
The maximum rent of a social rental property is calculated according to a point system. A property is awarded points based on the quality of the property, including the living area, the amenities in the property, the WOZ value and energy efficiency. The more points a property has scored, the higher the rent is allowed to be. Under the new law, this system will be expanded, which should create a ‘regulated middle rent’.

Regulated middle rent

A social rented house with 147 points has a legal maximum rent of around 880 euros. Under the new law, this point system will be expanded. Thus, houses with a score between 148 and 186 points – currently still covered by the free sector – will be classified as regulated middle rental houses. A maximum rent will also apply to a rental property up to 186 points. This will be around 1,100 euros.

Point system enforceable

The new law also stipulates that the point system will be enforceable. Municipalities will ensure that landlords comply with the point system and do not charge too high rents. It will also be easier for tenants to make their own reports. They can go to the Rent Commission for a rent review at any time under the new law.

What does this mean for tenants and landlords?

Rents are expected to start falling when the law comes into force, scheduled for 1 July 2024. Over time, more than 300,000 rental properties are expected to fall in price, with an average reduction of around €190 per month. However, it is important to note that if you currently rent a property, your rent will not automatically fall from 1 July 2024. This is because the law only applies to new leases. So until then, a landlord is allowed to charge a higher rent.

Feared consequence

One feared consequence is that (private) homeowners will sell their rental properties en masse. This is because a lower rent leads to lower returns. This will possibly result in an even tighter rental market, a concern also shared by the Council of State.

As a landlord, how can I prepare for this?

There is a growing likelihood that the Affordable Rent Act will be introduced in the near future. As a landlord, it is wise to already investigate how many points your property scores. If this number exceeds 186 points, the property will at least remain in the free sector. If the score is lower, it can possibly be raised above 186 points by investing in sustainability, for instance. This can certainly pay off in the long run.

Questions

Do you have questions about the new law or other issues concerning rental law? Then contact one of our lawyers by mail, telephone or fill in the contact form for a free initial consultation. We will be happy to think along with you.