September 25, 2023 1:01 pm

German government considering rent freeze, according to RT Business News.

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Berlin is considering implementing a three-year nationwide rent freeze in an attempt to alleviate the burden of high living costs on the population. The proposal is a response to the sharp increase in rents, which has caused difficulties for tenants as Germany deals with the ramifications of the energy crisis and persistently high inflation.

Verena Hubertz, the Social Democratic Party’s deputy parliamentary group leader, stated, “We need a breather for tenants – we need a rent freeze for the next three years.” If approved, landlords may be required to refund rents classified as “usurious” if the rate charged exceeds the local market levels by more than 20% in areas where housing is limited.

The government also plans to strengthen existing rules that restrict rent hikes. Currently, rental increases are capped at 20% over three years, or 15% in areas with particularly tight housing markets. Berlin has already agreed to lower this cap to 11%, but the federal government believes this is insufficient.

Under the proposed freeze, rents would be allowed to rise by a maximum of 6% in cities with high demand, while the rest of the country would have a blanket freeze on rent increases. This new measure aims to combat the record surge in housing costs witnessed this year in Germany. Traditionally, the country’s housing market has been stable enough to allow families to live in rented accommodation throughout their lives without the need to purchase their own property.

Currently, nearly 60% of Germany’s 41 million households reside in rented accommodation, according to the German Federal Statistical Office. However, the country is also grappling with rising prices for other goods. Consumer price inflation was 6.2% in Germany in the year leading up to July, higher than the Eurozone average of 5.3%. This persistent inflation contributed to Germany slipping into recession in the first quarter of this year, as the nation faced reduced energy supplies from Russia.

The proposed rent freeze aims to provide relief to tenants burdened by skyrocketing housing costs. By limiting rent increases and introducing refunds for excessive rents, the government hopes to ease the strain of the cost-of-living crisis on the population.

It is important to note that this measure is still under consideration and has not yet been implemented. Berlin will need to assess the potential impacts and feasibility of the rent freeze before finalizing the decision. However, if approved, this freeze could provide much-needed stability and financial relief for German tenants facing the challenges of the current economic climate.

For more stories on economy & finance, visit RT’s business section.

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Opinion pieces don’t necessarily reflect the position of our news site but of our Opinion writers.

Original Source: German government considering rent freeze, according to RT Business News.

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