Dutch Social Housing Finance Under Pressure

Published by Dutch Housing Federation Aedes, the Aedes Benchmark 2025 provides a comprehensive overview of the performance of Dutch housing associations covering tenant satisfaction, finance, maintenance and retrofit, sustainability, new schemes, affordability, and livability.

With 96% of associations participating, the benchmark offers a robust, sector-wide perspective and serves as an important tool for transparency, peer learning, and continuous improvement.

Ortec Finance contributed to the benchmark by providing all results for the finance-related metrics. In this article, we share several insights into these financial metrics at the sector level. Additional (graphical) results are available in Dutch on the Aedes Benchmark website.

Controllable operating costs have reached record highs, driven mainly by rising personnel expenses

Operating costs have reached unprecedented levels. For the second consecutive year, controllable operating costs, those that associations can directly influence, such as personnel, ICT, housing, and insurance, have surpassed non-controllable costs like taxes and levies.

In 2025, controllable costs rose to €1,097 per home, the highest since the inception of the benchmark. This increase is driven primarily by personnel expenses, which grew from €573 to €627 per home, largely due to a 10% wage increase for permanent staff.

Although the use of external contractors remains necessary in a tight labour market, their share in total personnel costs has, for the first time in years, ceased to grow.

Investment in home improvements has risen more sharply than other maintenance-related expenditures 

In 2024, housing associations spent €12.1 billion on maintenance, refurbishments and retrofitting for their existing homes. That is a 15.2% increase compared with 2023. Approximately 3.6% of this growth can be attributed to higher construction costs (inflation). The remaining increase, over 10% is because housing associations focused their priorities on upgrading their existing homes. 

Operating cash flow falls short, resulting in increased deficits and a reliance on external financing and sales

Because of rising costs, the sector’s operating cash flow is no longer sufficient to cover all ongoing expenses. The average weekly deficit per home has widened from €3 per week to €11, as spending on maintenance, refurbishments and retrofitting now outpaces net rental income after operating costs, interest, and taxes. This shortfall means that housing associations can no longer fully finance their activities from internal cash flow, let alone fund new schemes. As a result, they are increasingly relying on external financing and, to a lesser extent, the disposal of existing properties to bridge the gap. 

Borrowing has surged dramatically, with over half of all investments now debt-funded, reflecting strong investment ambitions and constrained rental income growth.

Investment by housing associations has increased steadily for many years, in line with the Dutch National Performance Agreements. An even larger share of this investment is financed through borrowing. Whereas in 2020 only 21% of newbuild and improvement expenditure was debt funded, by 2024 this had risen to 56%, meaning more than half are now financed with loans.

The graphs below illustrate the sources and uses of investment funds. Several points stand out:

• Housing associations have significantly increased their investment in recent years: an annual rise of €2 billion, which is 71% more than in 2020.
• Operating cash flow (net rental income) remains largely unchanged between 2020 and 2024, despite the abolition of the landlord levy. This reflects the fact that costs, particularly for maintenance and home improvement, are rising faster than rent.
• Sales proceeds have declined by 22%, even though house prices have risen sharply, by almost 40%. Associations are selling far fewer homes, possibly due to growing societal pressure on them to reduce sales.
• Consequently, the sector's loan portfolio has increased substantially between 2020 and 2024 in order to finance these higher investment levels.

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