The income-related rental policy set by the Dutch government in July 2013 has since seen rent prices rise on average by 9 per cent.

Adoption of the policy varies between the different housing sectors, with rental prices increasing more sharply in the social housing sector than in the free housing sector.

2013 policy increased rent

In July 2014 the average price for renting a home in the Netherlands increased by 4,4 per cent. A year earlier, at the introduction of the policy, the rent increased by 4,7 per cent. This means that average rent is roughly 9 per cent higher than pre-policy prices, according to a study conducted by the CBS.

On average rental prices have increased by 9,2 per cent in two years, compared to inflation over the same period which stands at 4 per cent. Rental price increases for 2014 were already anticipated.

Rent influenced by inflation and income

For the second consecutive year the rent increase for 2014 was based on inflation of the previous year (2,5 per cent); a fixed margin rate (1,5 per cent) and an extra income-related increase of 0,5 or 1,5 per cent for middle or high income households.

There are three household income brackets: low (up to 34.085 euros), middle (34.085 to 43.602 euros) and high (more than 43.602 euros). The rent increase was greatest for high-income tenants who live in social housing, with an increase of 6,5 per cent for 2014.

Social housing more expensive

Four out of five rental homes are social housing, which is rented out by social landlords (sociale verhuurders) such as housing associations (woningcorporaties). Social landlords increased rent by an average of 4,7 per cent, which was significantly higher than the 3,2 per cent rent increase by private landlords.

Free sector rental prices rising more slowly

In the last year, social landlords have applied the maximum rent increase more frequently than private landlords.

For example, 62 per cent of low income tenants received the maximum rent increase for 2013 (4 per cent), while more than 50 per cent of middle income households received their maximum 4,5 per cent increase. Around 66 per cent of high income tenants had to absorb the maximum rent increase of 6,5 per cent for their income bracket.

Of tenants who rent a house from a private landlord, nearly 55 per cent received the maximum rent increase.

A strategic policy

The income-related rental policy was introduced by the Dutch government to make more social housing available to lower income groups; to facilitate the flow of the housing market and to encourage tenants to buy a house instead of renting.