Uncertainty over rent regulation continues to affect the rental housing investment market. Mid-2025 marks 1 year since the Affordable Rent Act came into force. It has created mixed experiences. For existing portfolios, the impact has been relatively limited for most institutional investors because they have relatively sustainable portfolios, which means the properties have a relatively high number of WWS points. For private investors, however, it has caused a wave of sales. In general, their property is less sustainable, which means that the homes have been hit substantially by regulation. In addition, they have faced higher fiscal pressure. In the new-build market, the new-build surcharge of 10 per cent has ensured that in many cases there are sufficient returns to be made.

However, local mid-rent schemes do create a stacking of policies. In the first half of 2025, several large municipalities aligned their middle-rent policies with national legislation as much as possible but the problem of policy stacking remains. Outgoing minister Keijzer announced a number of changes for the Affordable Rent Act in mid-2025. The most important is to adjust the operation of the WOZ cap. If, due to this cap, the property falls into the regulated segment, then the rent may be asked in accordance with the actual number of WWS points where the WOZ points count in full. This ensures that a rent above the middle rental limit can be asked for these properties. The legislative amendment is currently under consultation and will still require parliamentary debate.

Another important development in the field of regulation is the Bill on Strengthening the Regulation of Public Housing. The law regulates a number of issues that will give the state more influence over local housing policy. One of the things it regulates is a minimum programming of the housing segment within the regional new-build programme. Here, 2/3rds must be affordable, of which 25 per cent must be affordable buy and 1/3rd social. Affordable purchase means homes costing a maximum of €405,000. For this, a buyer can get an (interest-free) loan of up to €70,000 from the National Affordable Purchase Fund, which returns to the fund after the house is sold. Adding a minimum requirement for affordable purchase will leave a maximum of 12 per cent for middle rental, which will limit the investment supply as a result. The bill has passed the House of Representatives and will be debated in the Senate after the summer recess of 2025.

The investment market is expected to show relatively low activity in the second half of 2025. Due to the announced transfer tax cut, volume will be somewhat lower especially in the fourth quarter as investors postpone purchases until after the tax change. As a result, 2025 is unlikely to improve on the 2024 volume. Meanwhile, the fall of the government and the upcoming elections in October this year do create new uncertainty in the market about rent regulation and tax policy. In recent years, this uncertainty combined with risk-free rents has ensured low activity in the investment market. Due to the relatively stable forecast of risk-free interest rates, initial yields will not start showing large movements.

Geopolitical uncertainty may change this but so far the effect on the Dutch economy seems limited. The market for owner-occupied houses is expected to continue to perform well through the rest of the year and into 2026. Although the pace is slowing somewhat, salaries are still rising at rates well above inflation. With this, the spending space of home buyers is also widening which is generally driving up house prices. In addition, mortgage rates have been relatively stable for some time.