Good returns are still possible despite the changes
Since 1 July 2021, the municipality of Rotterdam has stopped issuing new room letting permits in Oud Charlois, Carnisse, Tarwewijk, Bloemhof, Hillesluis and Oud Mathenesse. Riva has had to adapt, as we let many spacious three-bedroom properties in these neighbourhoods. They are popular among expats and international students.
Rental homes with several bedrooms
Riva primarily offers rental homes in Rotterdam occupied by expats and international students. They often stay in Rotterdam temporarily for work or study and naturally prefer to share accommodation with other expats or students. On behalf of homeowners and investors Riva therefore lets many multi-bedroom homes so that we can serve and retain this important target group as effectively as possible. We also cater for private families.
Student accommodation was often let to a maximum of three people, all named on one contract rather than on three separate agreements. It is still possible to let a home to a couple and one other person.
It is now necessary to apply for a room letting permit from the municipality. We advise owners to apply for a permit for properties that were let to three people before 1 July 2021. The fee is €50. Once issued, the permit remains attached to that property, even if the tenants change.
The owner can submit an application on the municipality’s website using DigiD. The application form is somewhat outdated: it still states that the occupants must be students and that proof of enrolment from their educational institution is needed. However, the rules also apply to expats and couples sharing with one other person. In those cases, for example, a blank form can be uploaded to continue with the application.
Meanwhile, we are in discussions with the municipality about the new rules so that we can provide the best and most direct support to the landlords and tenants who work with us.
With these new measures, Rotterdam City Council aims to improve access to affordable homes for local residents. New room letting permits will therefore no longer be issued in additional neighbourhoods. A first-time buyer loan will also be introduced, and people working in certain essential occupations will receive priority for rental homes in some areas.
From 1 July 2021, the municipality will no longer issue new permits for room letting in the southern neighbourhoods of Oud Charlois, Carnisse, Tarwewijk, Bloemhof and Hillesluis, or in Oud Mathenesse in the west. In certain other neighbourhoods, including East and West Kralingen, the municipality had already stopped issuing permits for new room letting arrangements the previous year. The change is part of the Fair Renting and Letting action programme, which aims to tackle abuses in the private housing market and responsible landlord practices are encouraged. The measure is designed to prevent rent inflation and nuisance caused by overcrowding. In addition, a permit is now required when letting rooms to three (previously four) occupants in one and the same property.
If the owner or landlord also lives in the property, no more than one room may be let to a lodger. Previously, two lodgers were permitted. To prevent previously lawful living arrangements from becoming unlawful under the new rules, transitional arrangements apply until September 2022. This map shows where room occupancy is permitted and where it is not.
Responsible letting does not have to be a dream
Direct returns and future value remain attractive
It is no coincidence that the designated neighbourhoods are precisely the areas where Riva advises clients to buy homes to let. These emerging districts have not yet experienced exceptional house price rises. As an estate agency we support a growing number of investors buying apartments for letting, and point them towards the opportunities offered by southern districts such as Carnisse, Charlois, Hillesluis and Oud Mathenesse. They can achieve attractive returns there. Property investment has for some time delivered better returns than leaving money in a bank account earning little or no interest. Investing in cryptocurrencies currently offers less certainty too. We advise an increasing number of investors and recommend that they continue investing in these areas.
Responsible letting and sustainability come first
Riva operates according to the principles of responsible letting advocated by the government. We always aim to improve sustainability, as banks and local authorities rightly require. We like to lead by example through excellent projects. Our aim is to demonstrate responsible, valuable business practices and distinguish Riva from unscrupulous letting agents. Riva creates attractive living spaces, and we want to continue doing so. Our shared goal of improving the city by providing homes for responsible, educated residents is a worthwhile ambition.
Riva has extensive experience transforming dated homes. The renovation work carried out by skilled tradespeople on behalf of our clients adds value. The layout is optimised for maximum returns, and the property is made energy efficient (at least energy label B) and luxurious. We look for opportunities to earn extra rent valuationpoints . The point total depends on the floor area (for example, a dormer window can create more usable space), the number of heated rooms and the quality of kitchen and bathroom finishes, such as fully tiled walls and a long countertop.
Under the new measures, monthly rental income may be lower because a property can house only two tenants instead of three. Even so, owning the apartment remains a sound long-term investment. House prices in Rotterdam continue to rise; slightly less rent is outweighed by capital appreciation.
Owners who would rather sell can list their house or houses through Riva Makelaars. Riva has a network of investors who continue buying properties, including those with tenants in place.
Opportunities for families
Through its new rules, the municipality wants to prevent more homes from being divided into rental rooms and becoming unavailable to families. First-time buyers aged 18 to 35 purchasing their first home in the city for up to €325,000 will be able to borrow up to €30,000 from the second half of this year. The loan bridges the gap between the purchase price and the maximum mortgage. The first-time buyer loan still needs approval from the city council, which will consider its financial feasibility in early July.
From 1 September, people working in essential public-service jobs, such as healthcare, education or the police, will receive priority for homes let by housing associations and private landlords in certain neighbourhoods.
Continuing to attract students
Riva will of course adapt its operations and always let its properties legally. We hope the announced changes will not make the city less attractive to students. Not long ago, the municipality joined forces with Rotterdam’s educational institutions to launch the campaign: Rotterdam is waiting for you to give new students a warm welcome.
A campaign visual
In its Housing Vision 2030 the municipality included the objective of ‘Attracting and retaining students and young talent’ . The new rules may make it difficult for these socially mobile, ambitious young people to find a home. They may choose another university city or stay with their parents and never settle in Rotterdam afterwards.
The city is also attracting innovative start-ups. These young companies often draw international and Dutch interns and new graduates to Rotterdam. Such temporary workers need inexpensive accommodation and often choose to share an apartment. Finding a home quickly on a limited budget may now become harder for them too, as they receive only an internship allowance or student funding.
Ultimately, the announced rules could certainly affect Rotterdam’s overall appeal. This comes at a time when many businesses are working hard to make the city as attractive as possible for its growing population, for example by offering, as Riva does, pleasant homes and excellent service.
Would you like to invest, let a home or find somewhere to rent? Please get in contact with us. Riva is happy to help, including with questions about legislation, regulations and future developments.