Investing in the Dutch housing market: the opportunities of the Affordable Rent Act

Housing market
Mitchell Hirschstein
July 5, 2024

It is now official, the Affordable Rent Act (Wet Betaalbare Huur) is coming. On June 25, 2024, the Senate approved the legislation, so investors finally know what to expect.

In this blog, we briefly discuss the effects of the Affordable Rent Act and how investors can deal with it.

The Affordable Rent Act: what does it mean?

New rent rules (price level July 2024)
New rent rules (price level July 2024)

What do the experts say about the Affordable Rent Act?

Much has already been said and written about the possible consequences brought by the Affordable Rent Act.  

All in all, the reactions are quite negative. In any case, the Affordable Rent Act is not going to provide more rental housing. 

What does this mean for investors?

Conduct proper research!

As an investor, you need to start right away with doing some proper research about your properties: 

Housing Rating System (WWS)
Housing Rating System (WWS)

Make the right trade-off and adjust your strategy

As an investor, you are also going to weigh up whether it is still profitable enough to rent out the property, because no one wants to rent out with a negative result. 

Take a good look at all the costs involved in renting out the property and set this against the rent you can charge a new tenant. This will give you a good idea of your future net return. This should be in a healthy ratio to the vacant value of the property, because as an investor you do want to be adequately compensated for the value of your property. If the return is insufficient, you will consider selling the property empty. 

This makes the development of house prices extra important. After a dip in 2022, we are now seeing a rising trend in average sales prices again. This offers perspective for investors.

Actual numbers
Source: Marktinformatie koopwoningen | NVM

Impact on the rental market

The sale of these properties will affect the rental market. Fewer rental housing units will become available, while there is already a shortage of rental housing. Rents in the social and middle segments are now fixed, putting more pressure on free sector rental housing. This is something you can capitalize on as an investor.

transaction price development quarter-on-quarter
Source: Prijsstijging woningmarkt zet door | NVM

How to invest under the Affordable Rent Act?

Investing in properties covered by the Affordable Rent Act becomes a simple calculation. 

So investing in rental properties can still be a good investment, but the Affordable Rent Act does show that as an investor, you must always be aware of new legislation and be prepared to adjust your strategy. 

Affordable Rent Act

At BRXS, we follow all these developments closely so that we are well prepared and can act appropriately. As an investor, you can benefit from this. You can invest staggered in notes to purchase rental properties that have been tested against the applicable laws and regulations. In our next blog we will take you through the preparations we have made in response to the Affordable Rent Act, because of course we have also looked closely at our existing rental properties.

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