The rent freeze: An overview from Schwarzat Capital GmbH

The rent freeze is a political instrument that was introduced in Germany to curb the rise in rents in tight residential areas. This regulation, which came into force in 2015, aims to protect tenants from excessive rent increases and regulate the housing market. Tenants are often affected by drastic price increases, particularly in large cities and conurbations where demand for housing exceeds supply. Sven Schwarzat explains the rent brake in this article.

What is the rent freeze?

The rent freeze limits the rent that can be charged for new rentals. In areas with a tight housing market, the new rent may not be more than 10 % higher than the local comparative rent. The local comparative rent is determined on the basis of rent indexes drawn up by the cities or municipalities. This regulation is intended to prevent landlords from charging exorbitant prices for new lettings and thus reduce the financial burden on tenants.

Scope of application and exceptions

The rent freeze does not apply to all cities in Germany. The regulation is only applied in certain cities and municipalities that are classified as "tight residential areas". The list of these areas is updated regularly and is subject to change. There are also exceptions: New buildings completed after October 1, 2014 are not subject to the rent freeze. Extensively renovated apartments are also excluded from the regulation, provided the landlord can prove this.

Effects on the housing market

The introduction of the rent freeze has been viewed both positively and negatively. Supporters argue that it protects tenants and helps to keep housing costs within acceptable limits. In many cities, it has been observed that the rent freeze was actually able to curb the rise in rents in the first few years of its introduction.

Critics, on the other hand, see the rent freeze as an inadequate means of solving the fundamental problem of the housing shortage. They argue that the regulation could lead to landlords investing less in housing construction as yields could fall. In the long term, this could lead to a decline in the supply of housing and further exacerbate the situation on the housing market. According to Schwarzat, the rent freeze can only make sense if it is accompanied by the targeted promotion of new construction and social housing.

Opportunities for tenants

Tenants who live in an area where the rent freeze applies should find out about their rights. If they feel that the rent is above the maximum permitted amount, they can contact the Tenants' Protection Association or seek legal advice. It is important to know the local comparative rent and to request a rent reduction if necessary.

Conclusion

The rent freeze is an important instrument in German housing law that helps to regulate rents in tight markets. Although it has had some success, the debate about its effectiveness and the need for further housing reforms remains unabated. It is crucial for tenants to know their rights and actively engage in the housing market debate. A sustainable solution to the challenges facing the German housing market can only be found through a combination of protective measures for tenants and support for housing construction.

About the author: Sven Schwarzat is Managing Director of Schwarzat Capital GmbH, based in Lützen. With this GmbH and also privately, he holds numerous properties in his portfolio, carries out construction projects and rents out his apartments. His focus is in and around Leipzig. His expertise and experience make him a reliable advisor for general questions on real estate and specifically on the Leipzig real estate market.

For further information, please contact (also responsible for this press release):

Schwarzat Capital GmbH
Mr. Sven Schwarzat
Ernst-Thälmann-Straße 18
06686 Lützen
Germany

phone ..: 034444909876
web ..: http://www.schwarzat-capital.de
email : info@schwarzat-capital.de

You may use this press release - even in modified or abridged form - free of charge on your website with a source link to our homepage.

Schwarzat Capital GmbH
Ernst-Thälmann-Straße 18
06686 Lützen
Germany

https://schwarzat-capital.de

Herr Sven Schwarzat
034444909876

info@schwarzat-capital.de

About the author: Sven Schwarzat is Managing Director of Schwarzat Capital GmbH, based in Lützen. With this GmbH and also privately, he holds numerous properties in his portfolio, carries out construction projects and rents out his apartments. His focus is in and around Leipzig. His expertise and experience make him a reliable advisor for general questions on real estate and specifically on the Leipzig real estate market.

This release was published on openPR.