New resi rules change Dutch investment environment

Tijmen Brüne of law firm CMS has assessed the likely impact of new regulations that are being introduced in the Netherlands’ residential property sector.

These include a ban on temporary lease agreements which previously made it possible to agree a contract for two years. A new sector of residential lease agreements will also be added to the current two. “There’s a regulated market and there’s a non-regulated market and there will now be a midmarket sector,” Brüne explained. This third sector is intended to encourage the creation of an increased amount of affordable housing.

“That will have an impact because over 90% of the residental market will now be regulated,” he said. This will affect the income of investors and the numbers for new investments.

Furthermore, the Dutch residential market is also affected by the increasing amount of regulation around ESG. “The most important one is the EU taxonomy and at the other end is the carbon real estate monitor,” Brüne explained.

However, the EU taxonomy is already built into BREEAM certification. Many users anyway want a building with a high BREEAM rating, both for their own marketing purposes and to provide a good environment for employees.

There are also financial advantages to compliance with the EU taxonomy, notably obtaining finance at a beneficial rate, Brüne said.