Should inflation-linked rents be allowed to rise indefinitely even in times of extreme inflation? Federal Building Minister Geywitz calls for a cap – in view of an inflation rate of more than ten percent.
Federal Building Minister Klara Geywitz (SPD) wants to cap the increase in rents for apartments and houses if it is linked to the general inflation rate. “Index leases are a problem,” Geywitz told the “Frankfurter Allgemeine Zeitung”. Given the lack of affordable housing, tenants often have no choice but to sign such contracts. They are then doubly burdened by the increased energy prices, because both the ancillary costs and the cold rent have increased.
“You can change that,” said Geywitz. “Hamburg’s proposal for a cap of 3.5 percent per year is an option that will not place an unreasonable burden on tenants or landlords.”
Federal Council initiative from Hamburg
The red-green Senate of the Hanseatic city decided on a corresponding Federal Council initiative this week. With an index rent, the landlord can adjust the cold rent annually as much as the general cost of living has increased. The consumer price index of the Federal Statistical Office is decisive.
According to Building Minister Geywitz, it would also be conceivable to link index rents to a different benchmark. “You could also choose the net cold rent index as a reference point,” said the politician. “This is also an official index determined by the Federal Statistical Office.”
Leases that adjust for inflation have long been beneficial to tenants. But since the currency devaluation has increased very much, such contracts cause problems for many people. In October, the inflation rate rose to 10.4 percent – mainly because of expensive energy.
More and more index leases?
However, Marco Buschmann’s Federal Ministry of Justice (FDP) is responsible for tenancy law. A spokesman for the minister told the “FAZ” that there was no need for regulation. “Legislators should not change the rules of the game for current contracts at every opportunity.”
The interest group of tenants, on the other hand, also sees a need for action. “The German Tenants’ Association is demanding a ban on index rents for new contracts and the introduction of a cap for existing tenants with index rental contracts, which may not exceed the eleven percent agreed by the traffic light coalition for non-index rental contracts in three years,” quoted the newspaper’s federal director Melanie Weber -Moritz. Some tenants’ associations reported that index leases are now being concluded for half of all new leases.