Rental market under pressure: wave of investor sales and political measures change the playing field

No shrinkage in rental market despite wave of sales by private investors

Property investors continue to sell rental properties at a brisk pace. In the third quarter, they sold 12,200 rental properties, over 4,400 more than in the same period last year.

Despite this, there is no sign yet of a shrinking rental market. Interestingly, almost half of these homes went to owner-occupiers. According to Korevaar, this number is unprecedentedly high since the Land Registry (Kadaster) started collecting this data in 2009.

Political measures under fire

The wave of sales is partly attributed to stricter regulations that have come into force since 2021. Increases in transfer tax, regulation of mid-rent and the ban on temporary leases have put pressure on private investors' returns. Korevaar considers it plausible that these policy changes play a role in the accelerated disposal of rental properties, but stresses that it is difficult to determine the exact impact of each individual policy.

Korevaar points out that corporate and private investors ‘play a different game’. Large commercial investors partly bet on more expensive new construction for higher incomes, while private investors operate in a ‘very different segment’. They often rent out old smaller properties of relatively low quality to lower-income people.

‘Indeed often for a relatively high rent,’ Korevaar acknowledges. 'But precisely these properties, if they were not sold, would fall under the Middle Rent Act, which would eventually force the rent down. The outpouring threatens to eliminate this very type of property from the rental market, leaving fewer alternatives for people on lower incomes.'