People searching for a rental home in the Netherlands are facing less choice and higher prices in most places, according to new figures from housing platform Pararius.

The number of available houses and apartments on its website which are not covered by rent controls fell by almost 38% in the third quarter of this year, Pararius said.

The change is partly down to new rules, which have extended rent controls to cover all but roughly 10% of the rental market.

In total, just 12,368 properties without rent controls were available for rent via Pararius between July and September, the rental platform said. Some 9% of properties currently up for sale via the site are former rental properties, as landlords continue selling off smaller homes when they become empty.

Pararius said the average cost per square metre in the unregulated sector rose by 7.4% a month, pushing the average rent up to €1751 for an unfurnished property.

In Amsterdam, however, the price per square metre fell 1.7% to just under €27, still far above the other big cities and the average of €19.28. There was also a marginal drop in Utrecht and a 3% decline in Eindhoven.

There are no income restrictions on renting property costing between €880 and €1,200 a month, the rough limit for rent controls. However, there is a major imbalance between supply and demand, particularly in the category up to €1,500, Pararius said.

Meanwhile, the institutional investors association IVBN has warned that new rules restricting how much interest small landlords who operate as a limited company (BV) can deduct from tax will have a further impact on the availability of rental homes.

Currently landlords can deduct up to €1 million in interest from their taxable profits and 20% for higher amounts. The government plans to scrap the €1 million ceiling and bring in a 25% deduction instead. This goes much further than the EU, which has a €3 million ceiling and 30% over that.

Challenge

“We are facing a major construction challenge and need all available capital,” director Judith Norbart told the Telegraaf. “It is not sensible to make the interest rate deduction stricter than in other EU countries. Why are we scaring off the investors we need?”

The government says the measure will stop major investors cutting their investments into multiple limited companies to take advantage of the €1 million deduction. “But it will also affect smaller investors with a BV, and there are an awful lot of them,” said Peter Beets, an estate planner with ABN Amro MeesPierson.

Housing corporations, tasked with building thousands of new social housing units, will also be hit by the new tax rules.

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