Pitfalls of Rent Restraints: Why Stockholm’s Model Has Failed Many


Pitfalls of Rent Restraints: Why Stockholm’s Model Has Failed Many

2018-08-07T08:41:50+00:00August 7th, 2018|Advocacy, Local Updates|

“For the past two years, Viktor Fridh Kleberg and his girlfriend, Louise, have been sharing a studio apartment in Vasastan, one of the most desirable areas of central Stockholm. Together they pay 5,266 kronor (about £390) a month.
“I consider myself very lucky to be in the situation I’m in,” says Kleberg, 26, a student. “I have my own great, affordable apartment in an attractive area of the city, which allows me and my girlfriend to live the way we want to.”
Kleberg is one of the 40% of Stockholmers who are sitting pretty. They rent an apartment directly from a rental company and enjoy the benefits of the Swedish capital’s tightly regulated rental market.
Buy-to-let is almost unheard of. “It is considered speculation, profiting from people in a way you are not supposed to,” says Billy McCormac, head of the Fastighetsägarna property association.
“It is legally quite hard to acquire apartments and start renting them. You can sublet your rental apartment for a fixed period, but it’s up to the landlord.”
Rents are 1,050 kronor (£80) a sq m a year on average, so a single bedroom apartment of 65 sq m is about 5,700 kronor a month, or £420, according to Statistics Sweden. On average, rent makes up about a quarter of people’s income, according to Fastighetsägarna.
Each year, rent rises are negotiated between the tenants’ association, representing 350,000 tenants, and the Stockholm property agency, representing 5,000 private rental companies. Over the past decade, rents have risen by 19% – not far ahead of inflation, which was about 12%. Last year’s rent rise for the city was 1.12%.
“The protracted negotiations over the increase cost more than the additional money we will get,” McCormac complains.”

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