The Act, together with some tax measures, has put many landlords under pressure, prompting many to sell their properties. According to reports, this has led to a tighter rental market, meaning that fewer, rather than more, affordable rental properties are available to people looking for housing. Despite that, the Act nevertheless came into force on 1 July 2024.
Blog: Affordable Rent Act
What is it again?
The Affordable Rent Act has brought about many changes. In addition to social housing and the private rental sector, the Act introduced a third category of rental housing: the mid-range segment. For this segment, the Housing Valuation System (WWS) applies mandatorily, just as it does for social housing. In addition, the mid-range segment now also gives tenants access to the Rent Tribunal for various disputes. The WWS itself has also changed: for example WOZ values and energy labels are now assessed differently.
Changes for landlords
It is, of course, important for landlords to know what has changed since the Affordable Rent Act entered into force. The Act has extended rent regulation to the mid-range segment. Nothing changes for social housing – up to a maximum of 147 points – and for the private rental sector – from 187 points onwards. The mid-range segment consists of rental properties with a maximum of 186 points under the WWS. The maximum rent for these properties may then be € 1.228,07 per month (2026 price level).
The new Act has also amended the WWS. The impact of high WOZ values has been limited in order to prevent market forces from leading to “undesired” liberalisation. Energy-efficient homes are also rewarded with more points. A poor energy label can even result in points being deducted. Older properties, in particular, will therefore more often fall within the mid-range segment.
Private rental sector
Would you like to move your property into the private rental sector? The following improvements can lead to a higher points score under the WWS:
- improving roof,
- floor and wall insulation,
- replacing single glazing where necessary,
- installing a more sustainable heating system.
These improvements contribute to a better energy label for the property, which is the route to moving your property into the private rental sector. If you own a detached house with an energy label C and you improve it to energy label B, this can immediately result in 12 additional points under the WWS. If it concerns a duplex property, the improvement in energy label will even yield 15 points. It is important to note that these improvements may only be taken into account for rent under new tenancy agreements after 1 July 2024.
Another important change is the regulation of maximum rent increases in the mid-range segment. Landlords remain free to make their own contractual arrangements with tenants. However, the agreed increase may not exceed the statutory permitted increase. The statutory increase is calculated annually on the basis of collective labour agreement wage developments plus one percentage point. If this percentage is lower than the contractual rent increase, the statutory increase applies as the maximum.
Changes for tenants
Under the Affordable Rent Act, tenants in the mid-range segment also have access to the Rent Tribunal in disputes about rent levels, property maintenance or service charges. Tenants can request a rent level assessment by the Rent Tribunal and, on that basis, claim a lower rent. Within six months of the start of a tenancy agreement, tenants in the mid-range segment can recover any overpaid rent from the commencement date. After that period, the tenant can only claim rent back from the date on which the application is submitted to the Rent Tribunal.
Conclusion
Due to the Affordable Rent Act and the changes to the WWS, more properties will fall within the newly created mid-range segment. Landlords are also no longer entirely free to determine rent levels and rent increases themselves. Tenants of these properties now also have the option of bringing disputes before the Rent Tribunal. It may be sensible to carry out a rent level check yourself on the Rent Tribunal’s website (Huurprijscheck | Service | Huurcommissie). This will give you a good indication of the WWS points for your property.
More information
Do you have any questions about this article, or do you need advice about your new situation under the Affordable Rent Act? Please feel free to contact us.