Rents higher in 2019, but is this justified?

The rental prices of living space have risen considerably in recent years. The Central Bureau of Statistics (CBS) reports that when entering into a new rental contract, the rental price compared to the old contract is on average 8.2 % is higher.

One month extra rent per year

At a rental price of 1000 euros per month, this is an increase of more than 80 euros. On an annual basis this is even an increase of 1,000 euros. A new tenant therefore pays an average of one month extra rent per year compared to the previous resident. This while the average wage increase was only between two and three percent. What does this mean for the new tenant?

Rent and income increases

To be able to say something about this, we have to look at the increase in rent compared to the increase in income. An average net income in the Netherlands is approximately 2,000 euros per month. Assuming a wage increase of 2.5% and an increase in rent of 8.2%, this means that the monthly income increases by approximately 50 euros, while the rent increases by 82 euros. On balance, the new tenant will lose more than 30 euros per month.

Practical figures

Based on Bumarang’s own research into approximately 5,100 private rental properties, it can be concluded that the average rental price is approximately 935 euros per month. This rental price is on average 8.2% higher than the rental price of the previous resident. For all these homes, this involves an increase in rental costs of 4.2 million euros per year. Of this, only 3 million euros was compensated by an increase in income. Collectively, the tenants of the homes studied are more than 1 million euros per year more expensive.

Rent increase unjustified

In addition to the question of how the rent relates to the income, it is important how the rent relates to the Housing Valuation System (WWS). The WWS allows the maximum reasonable rental price of a home to be calculated. This system applies to all homes in the Netherlands.

Of the 5,100 homes examined, approximately 500 homes were not too expensive based on the WWS. This means that more than 85% of the homes were rented too expensively. The average legal maximum rental price of the homes is 560 euros. On average, the homes examined were rented too expensively by 375 euros per month. The tenants of the homes studied together pay more than 20 million euros too much rent per year. According to the law, there can therefore be no increase in the rent. Any rent increase is therefore unjustified. If none of the tenants of the homes studied paid too much, this would yield an increase in purchasing power of approximately 4,000 euros per tenant, or an average of two monthly salaries.

Tip of the iceberg

Bumarang has only investigated a small part of the rental market, but we believe that the research provides a representative picture of the current situation on the Dutch rental market. Tenants’ costs are constantly increasing. This is unjustified and something can be done about it. Bumarang is committed to helping tenants easily reduce their rent and thus save more money.

New rental property? Lower your rent!

Have you concluded a new rental contract during the past year? Please always contact us. We will tell you without obligation whether your rental price is too high and what we can do for you. Reducing your rent yields an average of two net monthly salaries. Read here more about reducing your rent.

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