Housing minister Stef Blok is to allow developers to build thousands of small flats for single people and young couples which will have rents of over €720 a month.

The aim is to provide accommodation for young people who earn too much for a rent-controlled property but cannot afford the sky-high rents being demanded in  Amsterdam and Utrecht.

The average rent charged for a new contract in the Dutch capital now tops €2,000 a month, according to recent research by housing platform Pararius.

Small studios

Blok’s new regulations would allow developers to charge higher rents for their properties even though they are too small to count as ‘free sector’ housing. The flats, which will be around 40 square metres in size, will be in ‘good locations’, Blok said in a briefing for MPs.

Investors will be interested in the new projects because they will be allowed to charge higher rents, Blok says. He has also introduced measures to make it easier and more attractive financially to convert empty nursing homes and office blocks into housing.

Recent calculations by housing advice group Capitol Value showed investors are prepared to pump €5.5bn into affordable non-rent-controlled properties, Blok said.