Ministry amends regulations for the sale of association-owned housing

A clear divide in the regulations
Associations own approximately 78% of the rented housing on the Dutch market, in total around 2.25 million homes. The new regulations will apply to homes with a maximum (potential) rent higher than the rent-control ceiling. The number of homes concerned is estimated to be between 800,000 and 1,000,000, and this may go up due to the proposed changes to the housing evaluation system (Woningwaarderingstelsel, WWS).

Amended regulations may lead to more investments by associations.
Ing. Marijn A. Snijders MRICS RT: ‘Following years of uncertainty it is good news that associations will be able to sell property already and yet to be deregulated at market prices if they wish to do so. With this amendment, associations will acquire an important tool to release funds for new investments. In practice, current options to sell, such as selling off in individual units or selling to tenants, are not always sufficient to meet the association’s financial requirements. Selling off houses to investors may be a good addition to this’.

A growing number of associations looking to sell
Earlier research by Capital Value shows that more than half (56%) of the associations in the Netherlands are considering selling entire complexes. Expectations are that many associations will be taking advantage of the new regulations, as a result of which the percentage of associations wanting to sell may even go up. Kees A. van Harten, LL.M., MRE MRICS: ‘We are seeing associations becoming ever more critical of their own portfolio as they evaluate their core stock and decide which part qualifies for sale to investors, either as whole complexes or sale of individual units. These decisions will be based on public housing, financial and market-driven criteria’.

Billions available for investments in rented housing
There is huge interest among investors for buying association-owned housing. Marijn Snijders adds: ´There is a high level of interest, and not only from Dutch parties. We are noticing for the first time that a growing number of foreign parties are showing great interest in Dutch rented housing. In 2012 around 1 billion euros was achieved on the total residential investment market, while more than 2 billion was available. Due to the strong demand from investors, both on a national and an international level, and the increase in supply this volume will increase significantly in the next few years´.

The first transactions under the new regulations are expected to take place in due course.