New Rent Index Shows Steep Increase, Legislation Ineffective

The latest rent index shows rents in Berlin leapt by 9 percent over the past two years as landlords and renters both ignored legislation intended to slow rising rents, according to the Berliner Zeitung.

Average basic rent — Kaltmiete — has risen to nearly €6.40 per square meter from €5.84 per square meter in 2015, according to the paper.

The index is important because it guides landlords in setting rental prices and rent increases. If a renter pays below the current rent index, a landlord could bump up the rent to the current index as long as the increase doesn’t exceed 15 percent in three years.

Berlin landlords may also charge new renters no more than 10 percent above the index as part of legislation known as the Mietpreisbremse (rent increase cap). Prospective tenants can use the index to guard against illegal rents but the Berliner Zeitung said the city’s tough rental market is pushing renters to ignore the protections in order to score a roof over their head.

Ignoring the legislation can reportedly force the index higher the next time it is published.

“It’s problematic that the rent increase cap isn’t working,” Reiner Wild, head of the Berliner Mieterverein (Berlin Renters’ Association), told the paper.

The law doesn’t apply to new construction or renovated flats.

The Berliner Zeitung also said the index itself is problematic since it only considers leases completed in the past four years and not older rental agreements, which could help push down index figures.

The city won’t release the latest report, known officially as the Mietspiegel, until May 19. It contains more detailed information, such as neighborhood-specific rents and rental prices according to apartment type and standard.

 

Picture thanks Sludge G via Creative Commons.

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