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Affordable Rent Act: why existing construction is hit especially hard

Recent research by Cushman & Wakefield shows that the Affordable Rent Act does not have to stand in the way of the construction task. Curious about how we came to these conclusions? Then read our article!

Regulation in the housing market is, also in the new Framework Agreement, a widely supported political desire following the excesses in the rental housing market in recent years. With the Affordable Rent Act, the cabinet has decided that ‘medium-sized rented homes will receive some form of rent protection, in such a way that housing for middle-income households becomes affordable and it remains profitable for investors to invest in these homes’. Opinions differ on whether housing investment will remain attractive. Private capital tends to criticise the law, while institutional money seems to support it.

That housing investment remains attractive is necessary to solve the construction challenge. Theoretical case studies by Cushman & Wakefield show that existing construction is hit particularly hard by the Affordable Rent Act, while new construction benefits from better energy label ratings and the new construction surcharge. While the reality is that the Affordable Rent Act will lead to a larger part of the market being regulated, which will cause a portion of investors to experience financial setbacks and make certain investment product (such as small existing construction and new construction homes) less attractive, the case studies show that the Affordable Rent Act, need not stand in the way of the construction task.

Download the publication if you want to learn how we arrived at these conclusions.

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