Rent effect could be as much as 50%
Rent regulation does not always lead to lower rents. It continues to depend on the difference between the rent that owners can ask based on the market rent and the maximum WWS rent. Yet a severely negative rent effect is visible in the larger cities in particular. In the G20 we see that Enschede and Apeldoorn are the only cities without a rent effect on some of the future regulated sector properties. Or to put it another way, the market rent is the same as the maximum WWS rent, especially for larger homes.
Ratio of market rent and maximum permitted WWS rent in G20 according to size of property
Moreover, the smaller the property, the bigger the rent effect in almost all the large municipalities. This is all bound up in the fact that people are prepared to pay more for their first square metres of living area than for their last. In addition, a more pronounced shortage of these smaller properties is in line with the increase in the number of single-person households (mainly senior citizens and students).
We use the example of the rent effect on a 60 sq m property, as there are many of these in these cities and a large number continue to be built. For this size of property, the reduction in rent ranges from 13% for a sustainable (A++ label) property in Apeldoorn to 52% for a non-sustainable (F label) property in Amsterdam.
We use averages in these graphs, which means that in some cases the rent reduction may be even higher or lower than shown here. It is clear that the rent reduction is particularly large for non-sustainable properties within the regulated system. This while the difference in rent between sustainable and non-sustainable homes on the unregulated market is relatively small, driven by shortages on the housing market. On balance, the average rent reduction for non-sustainable properties (F label) in the G20 is 45%, whereas this is 26% for sustainable properties (A++).
Expected rent effect of regulation on 60 sq m properties with A++ labels and F labels
Caption: In order to define a dummy property, we looked at a representative 60 sq m property and allocated WWS points based on the characteristics of this type of property. Only the points for the energy label differ for the A++ label and F label homes.