Germany plans three-year rent freeze for tenants

[ad_1]

The measure is on the table “in view of the enormous rent increases in recent years and the drastically increasing ancillary and heating costs caused by the war,” Ms Hubertz said.

Of Germany’s 41 million households, almost half live in rented accommodation, according to the Organisation for Economic Co-Operation and Development (OECD).

Just over a fifth own their own home, the OECD found.

Official statistics show that the average tenant household spent almost 28pc of their income on rents last year.

The IFO Institute, an influential economic think tank, estimates that rents in Germany will rise by an average of 7.2pc per year over the next decade.

In 2020 a five-year rent freeze came into force in Berlin, locking most payments at their 2019 level and even reducing the monthly payments of tenants deemed to be overpaying for their accommodation.

But the Federal Constitutional Court, the highest court in the land, ultimately struck the measure down in 2021, ruling that the local authority did not have the power to impose the cap.

Economists typically reject rent controls on the basis that the policy undermines the supply and quality of rental properties available for tenants as landlords cut investment.

In the UK, Labour’s shadow housing secretary criticised rent control policies this summer.

Lisa Nandy said: “When house building is falling off a cliff and buy to let landlords are leaving the market, rent controls that cut rents for some, will almost certainly leave others homeless.”

[ad_2]

Source link