BGermany’s building minister Klara Geywitz (SPD) wants to limit rent adjustments linked to inflation. “Index leases are a problem,” said Geywitz of the FAZ. In view of the lack of affordable housing, tenants often have no choice but to sign such contracts. They are currently doubly burdened by the rising energy prices: not only the additional costs for heating and hot water have increased, but also the cold rent. “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.”
It is also conceivable not to link index rents to the development of the general price level, but to a different benchmark. “You could also choose the net cold rent index as a reference point,” Geywitz suggested. “This is also an official index determined by the Federal Statistical Office.”
Due to the rise in the inflation rate, index leases are increasingly becoming the focus of politics. The Federal Statistical Office reported a price increase of 10.4 percent for October. For 2022 as a whole, the federal government expects an inflation rate of 8 percent. Landlords who have concluded an index rental agreement with their tenants can increase the rent accordingly in the new year.
The rental price brake, which, with a few exceptions, only allows increases of up to 10 percent above the local comparative rent, does not apply in such cases. Only the initial rent of an indexed lease has to meet this rule. The red-green Hamburg Senate put pressure on Friday via a Federal Council initiative. The responsible committees should now deal with the limitation of adjustments to 3.5 percent that he has demanded.
Buschmann sees no need for action
The SPD’s problem: Within the federal government, Marco Buschmann’s FDP-led Ministry of Justice is responsible for tenancy law. That sees no need for regulation in the question. A spokesman said on Friday when asked that many people had done well with the index rents for many years. Last but not least, they would also have benefited from the fact that they were better protected against other rent increases, such as those after modernization. “Legislators should not change the rules of the game for current contracts at every opportunity,” said the spokesman.
The German Tenants’ Association sees it very differently: “The conclusion of index rental agreements has increased rapidly in recent months,” said Federal Director Melanie Weber-Moritz. “Some tenants’ associations report that index leases are already being agreed for half of all new leases signed.” “The German Tenants’ Association is therefore calling for a ban on index-linked rents in new contracts and the introduction of a cap for existing tenants with index-linked leases, which may not exceed the 11 percent agreed by the traffic light coalition for non-indexed leases in three years.”
It is not about a niche phenomenon, emphasized Minister of Construction Geywitz. “Index rental contracts also burden tenants who don’t have one at all.” Because rising index rents were included in the determination of the local comparative rents. “That’s why index rents are a rental market problem overall.” New figures from the construction industry indicate that it will be even more difficult to find an apartment in the future. Orders in the main construction trades literally collapsed in September. The Federal Statistical Office reported a minus of 22.6 percent compared to the same month last year, the sharpest decline since 2005.