Berlin Government approves 5 year Rent Cap

by Property 118

8:04 AM, 19th June 2019
About 3 months ago

Berlin Government approves 5 year Rent Cap

Make Text Bigger
Berlin Government approves 5 year Rent Cap

The Berlin Rent Cap is expected to become law in January next year and will apply to 1.5 million privately rented properties, but not to social housing or new builds. The rent cap is likely to be backdated to the date of the announcement, 18 June, to prevent landlords from pre-emptive rent rises between now and January.

It is being introduced by the left wing Social Democrats (SPD) who control Berlin and would also like to see it rolled out nationally.

German finance minister, Olaf Scholz, indicated his support for the plan saying he wanted to prevent Berlin rental market replicating London and said: “If we don’t want to end up like London, where even lawyers and doctors have to live with flatmates, because they can’t afford their own apartment, then we have to do something about it.”

The average monthly rent for a furnished Berlin flat is approximately €1,100, or roughly £979, with rents rising by 7% in the first quarter of this year, and doubling over the last 10 years.

Under the cap, landlords who want to carry out renovation work on a property will also have to seek official approval for any rent increases above 50 cents per sq metre. However, exemptions for new builds means that their costs to rent could increase sharply.

German Chancellor, Angela Merkel, is critical of the plans and warned: “We must also provide an environment for people to want to build”.

However, Katrin Lompscher, Berlin’s senator in charge of housing, said: “Housing is a basic need. With this new law we want to put a halt to the severe increase in rents in recent years and to calm the overheated rental market in Berlin.”

Surveys indicate 85% of Berliners rent their homes rather than owning them.



Comments

Darren Peters

11:20 AM, 19th June 2019
About 3 months ago

The leftie Berlin government sold off to investors 270,000 properties it owned and couldn't afford to maintain since it was bankrupt. Perhaps it should have sold these to its long term renters but that wasn't offered. In the east of the city some of these flats would have had peat burning stoves as the only source of heating in the 2000s. Investors have bought and made the investment to bring these and other properties up to a decent standard - which costs money. Now the Leftie govt and followers are upset that rents have gone up compared to the 'good old days' while conveniently omitting the fact that the good old days were squalid.

Then the population in Berlin is increasing massively so laws of supply and demand kick in.

It's sad that a lot of pensioners are having to move from the central areas they lived all their lives to the rougher outskirts.

Dr Rosalind Beck

12:26 PM, 19th June 2019
About 3 months ago

Reply to the comment left by Darren Peters at 19/06/2019 - 11:20
Excellent point. But why would they want the facts to get in the way?
A month or so ago I read that the same authority was also planning to seize people's private property in a Zimbabwe-style mass theft.

Darren Peters

12:56 PM, 19th June 2019
About 3 months ago

I think, since they are in power and understand the consequences, the leftie authorities are more pragmatic behind closed doors than the soundbites they spew.

The good citizens of Berlin can force a referendum with just 20,000 signatures so the govt is trying to steer the anger away from expropriation toward rent freezes as a sup. But not for social housing - do as I say, not as I do.

There are wider consequences for Germany if there is expropriation. The Nazi regime took the Jewish Germans' homes and businesses then the communists took everybody else's private homes in East Berlin and East Germany. The headlines write themselves since there will be examples of properties that were stolen then sold then stolen back again.

Plus of course, the govt probably can't afford to buy the properties let alone maintain them


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Does Multi occupancy/HMO affect property value?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More