Social Rent and Free Sector - What Are The Differences?

Social housing, free sector housing, huurwoningen. While the vrije sector huur in Amsterdam is exploding, the terminology may make your head spin.

Fortunately, it's not all that complicated, and we'll guide you through all the terms you have to know to make your way around the Dutch housing market.

Fair warning: lots of Dutch terms up ahead!

Sociale Huur – Social Rent

Social rent, or sociale huur in Dutch is a rather unique concept that originates from the countries conservative roots. Affordable housing has always been one of the cornerstones of the Dutch society, and until recent years, virtually any resident of the country would be eligible for a place to live through the social rent system.

However, while the social rent system hit the ground running when it was originally introduced, in recent years the gears have somewhat grinded to a halt. The entire system is clogged, as the housing in this rental "tier" are relatively cheap, while the market outside is soaring means more and more people are holding on to what they have.

The system never was designed for people to stick around for long periods of time. It was designed for people to "graduate" towards either free sector housing (which we'll cover later), or buying a place of their own to stay in.

Ever since the economic collapse of the early 2000's, fewer and fewer people have graduated from their social renting houses, thus clogging the entire system.

Waiting Lists

Because of this, waiting lists on WoningNet exceed 15 years for popular cities such as Amsterdam and its suburban regions like Aalsmeer and Amstelveen. The waiting list has been steadily climbing for years, even in smaller cities such as Utrecht and Haarlem.

On top of that, the social housing sector is city-bound. This means that if you join the waiting list, you only join it in a specific city. If you then decide to try your luck in a different city, you'll have to start over again.

Impossible for Expats

If you are moving to the Netherlands for work, it's virtually impossible for your to obtain a social rent apartment. Native residents are often finding it impossible to land a social rent apartment, and often fall into the category of subsequently never moving out once they do.

Subletting is Illegal

Renting out a social rent apartment is illegal, and can result in heavy fines and eviction for the "landlord", and potentially the tenant as well.

Be very careful when you're renting an apartment, and make sure you're not illegally renting a social rental apartment. It's usually a good indicator whether you can register at the address – landlords who are subletting often resist.

Key Takeaways

Here are some key takeaways considering social rent:

• The maximum rental price for a social rental house is €763,47
• Your annual income can not exceed €40.765 (in 2022)
• Always rented out through associations, so called woningcorporaties
• Illegal to rent through subletting, you may be evicted and fined
• Subject to the puntenstelsel, which dictates the maximum price for the property

Vrije Sector –  Free Sector

The free sector is just that: free. As in liberalized, not gratis. Our guide to finding a rental apartment in Amsterdam is a good start if you're looking to rent one of these.

Anyone can rent apartments, and the price is set by the market. The only condition to the price is that it is higher than €763,47; the social rent cap.

There has been a push recently for the free sector to also implement the puntenstelsel, as prices have been soaring in larger cities such as Amsterdam. It's very unrealistic to find an apartment priced at under €1.000, usually prices start at around €1.200-1.500. The puntenstelsel would price apartments based on its features, like the number of bedrooms, living area, and how well renovated it is.

The Owner Decides

One huge difference (apart from the price) is that the owner of the property decides who gets to rent their place. This means that timing is absolutely crucial in the free sector. If you're the first to call, and you have the proper credentials, your chance to rent an apartment go up incredibly.

Income Requirements

There is usually a minimum income requirement when it comes to free sector apartments. Traditionally, this has been around 36x monthly rent, per year. However, in recent years this has been going up to around 45x monthly rent per year.

If you have a partner, their income can usually be included too, at a reduced percentage.

For example, if you find an apartment that's €2.000 flat, you would have to make at least between €72.000 and €90.000 gross per year. Though we have seen the 45x marker, it's usually for more fairly priced apartments, rather than the upper few.

Expat Housing

Because the Netherlands has seen an uptick in the amount of people who moved to the country professionally (locally known as expat, short for expatriate), there has been an increase of expat housing, as well.

Expat housing typically is free sector, but it may come with additional options such as:

• A front desk, or reception
• Options to rent fully furnished apartments
• Less documentation required (expats are generally regarded as wealthy, and are backed by their employers)
• Utilities and other fees included in the rental price – all in pricing

Of course, you pay a premium for the courtesy. I would personally advise you to find non-expat housing, as it'll save you money in the long run. But if you do go for the option, consider the following:

• The agents usually take a fee. Make sure their fee is proportional to the duration of your tenancy
• Don't get shafted on fees. Find out what typical electricity, gas, water and other utilities would cost for an apartment, and make sure your landlord prices them reasonably
• Never rent furnished apartments blindly. The pictures could be very old, and the furniture very worn

If you need furniture for your place on the cheap, visit your local Kringloopwinkel (that's what thrift shops are called) or simply head down to IKEA. It doesn't have to be expensive!

Beware of Criminals

There are many criminals active in the Dutch real estate market, particularly in Amsterdam.

Here are some things to consider to prevent yourself from being scammed:

• Always Google the address when you're going for a viewing. Make sure it's not an Airbnb or other short-stay apartment that some person is trying to rent out ten times over
• Never ever transfer money to a stranger over the internet. Make sure you have signed paperwork before you pay anything
• Do not pay over 2 months worth of rent in reservations
• Make absolutely sure you are not renting a social rent apartment or room unless you have the government's blessing. This will get you into a lot of trouble

Good luck out there!