From first-time buyer opportunity to rental scarcity: diverging effects of the investor exit
The retreat of private landlords is reshaping access to both owner-occupied and rental housing. Many former rental homes, especially small apartments in urban areas, are now entering the market. These homes are generally more affordable, with lower absolute prices but high prices per square metre. This makes them relatively affordable to buy, but not necessarily cheap. As a result, they are attractive to younger buyers with limited budgets but a strong desire to move out of the overheated rental sector.
In Q4 2024, 62% of homes sold by investors were bought by buyers under the age of 35, according to Kadaster. This trend has continued in 2025. Recent figures show that young buyers, especially in the G4 cities of Amsterdam, Rotterdam, The Hague and Utrecht, are now paying more per square metre than older age groups. The price per square metre for buyers under 35 has reached record levels in these urban areas, surpassing other age categories for the first time.
While this shift improves access to ownership for younger households, it primarily increases pressure on the rental market, where affordable options are disappearing. At the same time, more first-time buyers are entering the owner-occupied market out of necessity, adding to competition in the lower price brackets. This underscores a fundamental shift in the housing system, in which renting becomes less viable and ownership the only stable option for many.
Although new rent caps now apply in the regulated mid-tier segment, the unregulated market remains unaffected. Prices in that segment continue to rise in response to limited supply and sustained demand. The rental market continues to contract at a notable pace. In Q2 2025, the number of available listings in the unregulated segment fell by 36.4% compared to a year earlier, with just 12,744 properties on the market. Rents continued to rise sharply, reaching an average of 1,830 euros per month nationwide. This reflects an increase of nearly 21% in price per month since the start of 2023 in the unregulated segment. At that level, a household would need a gross monthly income of at least 5,400 euros, well above the national median of 3,500 euros. In many urban areas, listings attract hundreds of applicants within days, indicating extreme scarcity and fierce competition, according to the rental website Pararius.
There is also a clear shift away from regulated segments such as social and mid-tier rentals toward the higher-priced unregulated sector. Recent market data show that investor-sold properties had an average price of 380,000 euros, while new investor purchases averaged between 540,000 and 700,000 euros. This suggests that newly acquired rental stock is concentrated in more expensive market segments, making it unlikely to replace the affordable units being sold off.
As renting becomes less accessible for middle-income households, more are being pushed toward the owner-occupied market. This growing affordability gap between renting and buying helps explain why young buyers are increasingly active and why investor-owned homes, often well located and modest in size, are quickly absorbed as they come onto the market.
Professional investors and the replacement gap
Professional buy-to-let investors are partially filling the gap left by exiting private landlords. Around 17,000 new rental properties are expected to be built in 2025, but these are concentrated in higher price segments, primarily in new urban developments, with average unit investment values exceeding €540,000. This is well above the pricing level of mid-market ex-rental stock. Without targeted incentives, such as lower transfer tax for mid-market acquisitions or more predictable rent regulation, new supply will not replace the rental stock that is being lost. In the absence of such measures, investing in mid-market rentals remains financially unattractive for professional landlords.
Outlook and policy considerations
While regulatory reforms have curbed rent growth in the regulated mid-market segment, rents in the unregulated sector continue to rise, and the overall effect has been a steep loss of private rental stock. Policymakers face a critical dilemma: balancing rental affordability and housing access against investment disincentives. The current mix of rent regulation, transfer tax increases and revised Box 3 taxation has sharply reduced net returns, particularly in the regulated mid-market segment. As a result, many small-scale landlords have exited the market, while new investment flows remain concentrated in the higher end of the unregulated sector.
In early 2025, the outgoing coalition signalled plans to ease some of the restrictions introduced in 2024, including reducing the scope of rent control and exempting small private landlords from certain rules. These amendments were frozen following the government’s collapse, leaving the broader rent cap regime in place with no timeline for revisions. In June 2025, Minister Keijzer withdrew a proposal to tighten rent control further after advice from the Council of State and a lack of parliamentary support. Despite this, the minister launched an internet consultation on 15 July 2025 to gather feedback on proposed amendments, aiming to inform the next cabinet and encourage continued investment in mid-rent housing.
Discussions around broader tax adjustments, such as relief or targeted incentives for mid-tier rental development, are ongoing, but no concrete measures have been implemented. Without effective intervention, it is unlikely that the affordable segment will be replaced, and the current trajectory suggests that housing diversity will continue to erode. According to forecasts referenced by Kadaster, the sell-off may gradually ease in 2026 simply due to fewer landlords remaining. However, without credible and coordinated policy efforts to attract investment in affordable rental properties, pressure on both the owner-occupied and rental markets is likely to persist.
