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It usually ends with an engagement, according to Hans Lind, professor of real estate economics at the Royal Institute of Technology.
– As a rule, you end up with rent increases that are not that far from the rate of inflation, he tells TT.
Lind recalls that according to the law, it is the previous rent level that applies until the parties have agreed on new levels.
According to Statistics Sweden, the inflation rate in August was 0.7 percent. This is significantly lower than landlord guidance on increasing rents nationally by 2.5 percent.
Rejected by the other party
And the idea of increasing rents nationwide by 2.5 percent is not unexpectedly ruled out by the other party, the Tenants Association, either. Among other things, reference is made to the widespread economic uncertainty in the crown crisis.
Erik Elmgren, deputy director of the Tenants Association, also notes that mortgage borrowers have been granted an exemption from amortization requirements through August 2021, reducing housing costs for 170,000 tenant-owners.
“For the three million renters in the country, no relief has been introduced. Instead, rent increases are now being proposed,” Elmgren writes.
The public good becomes a reference
In early September, the Swedish trade association public service, with more than 300 non-profit member companies, decided to refrain from indicating a nationwide rental development for 2021. Public service refers to sharp variations in the economic development as a result of the covid-19 pandemic.
Typically, Allmännyttan’s local rental agreements are a benchmark for the rest of the rental market.
In their proposal, the owners are careful to point out that the actual rental negotiations take place locally, at the local level, where any rent increases must be tailored to prevailing conditions.
In tune with purchasing power
However, according to the Owners, the basic principle is that the rents of the dwellings should be developed in accordance with the purchasing power of the households, in order to safeguard the position of the lease and promote further construction of new leases.
“Given the positive forecasts for the Swedish economy in 2021, a larger increase could be justified. However, the great uncertainty regarding the development of the pandemic in the surrounding world suggests that a slightly smaller adjustment is reasonable,” writes Tomas Ernhagen, Chief Landlord Economist, in a comment. .
But according to Erik Elmgren of the Tenants Association, the forecast for real household disposable income in 2020 is a decrease of 0.9 percent, while unemployment rises to a higher level than during the financial crisis.
“With the logic of the owners, the rents should be reduced rather,” he writes.
Joakim Goksör / TT
According to the National Board of Housing, Building and Planning, during the first half of the year the construction of 7,300 condominiums and 14,600 rental apartments in apartment buildings began. For condos, it was an 8 percent decrease compared to the previous year, while for rental apartments it was a 15 percent increase.
The latest forecast from the National Housing, Construction and Planning Board from early September says that a total of 48,000 homes will be started throughout 2020 and the number will drop to 42,500 homes in 2021.
In total, in 2019 there were just over 1.3 million rental apartments and just over 70,000 single-family homes with leases in the country, according to Statistics Sweden.
The rent for newly built homes since 2006 is normally higher than the average rent for the existing stock. It is called presumptive rent and it is valid for 15 years from the start of the house.
Where the presumptive rent ends is decided on a case-by-case basis, usually with a negotiation agreement between the housing company and the Tenant Association. In practice, this means that newly built apartments during the 15-year period are not included in the value in use system.
Sources: National Board of Housing, Construction and Planning, Statistics Sweden
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