Supply of private rental homes: lack of middle-expensive rent

For the Dutch rental sector, the amount of social rented dwellings still ensures households with lower incomes access to the housing, even so in cities where demand has risen strongly. However, households which are not eligible for social housing due to having an income which exceeds the limit for social housing, are finding it increasingly difficult to find affordable private rental housing. This goes especially for larger Dutch cities with a large housing shortage.

The figures below show the distribution of dwellings currently for rent in the private sector, for the largest city within one of the 5 regions with the highest housing shortage. The orange line indicates the monthly rent a median Dutch household would pay, when 40% of the disposable household income is spent on rent. The blue line indicates the monthly rent a median household within that city would pay, when 40% of the disposable household income is spent on rent.

Interestingly, in Amsterdam in particular, private rental dwellings for currently for rent in the private sector are mostly offered above € 1,200 a month.

On the other hand, assuming 40% of the disposable household income is spent on housing, a median Dutch household could pay € 1.216 per month, and a median Amsterdam household € 1,003 per month. The supply of private rental housing for a median household in Amsterdam is either becoming too expensive, or will require them to spend an even larger share of their income on housing costs than the mentioned 40%.

The same goes for the other larger cities in the Netherlands such as Utrecht and The Hague. Although a large share of households with lower incomes is still able to access the social rental sector in these cities, households earning too much for this sector and households at the back of the queue for housing in this sector, are struggling. This doesn’t mean that in all cities, the urgency is highest for private sector rent. For example, Nijmegen and Delft have a relatively higher share of mid-priced rental homes, but due to the relatively high number of students and other one-person households in these cities, there is a greater need for homes in the social housing segment.

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