Rentals: The increase in rents is limited to 3.5% for one year

The government is proposing to cap the increase in rents at a maximum of 3.5%, for a period of one year, to reduce the impact of inflation on tenants, we learned on Sunday from ministerial sources.

On Monday at 2:30 p.m., the National Housing Council (CNH), the housing stakeholders’ pool, was invited to give its opinion on this proposed measure – which the government calls rent shield – while inflation has become a major topic for renters.

A meeting of the Minister for Environmental Transformation and Regional Cohesion, Amelie de Montchalin, is also scheduled during the week with tenant associations, who have been calling for a rent freeze.

The rent shield device will be included in the Finance Act amendment, which Parliament will vote on this summer. In doing so, the government is ensuring that it has chosen a balanced solution, taking into account the restrictions of the owners and the restrictions of the tenants, according to sources in the Ministers of Economy and Environmental Transition.

At the same time, the government intends to upgrade the APLs in order to support the tenants who need it most. This personal housing assistance (APL) should be revalued from July 1, also by 3.5%, which will represent for the state budget an additional expenditure of 168 million euros, according to the same sources.

While the standard rent index may reach about 5.5% by the end of the year and be higher during the first half of 2023, if the measure is implemented, rents may increase by 3.5% at most for one year.

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A source in the Ministry of Economy said that this is a positive measure that does not exist among our neighbors. She emphasized that this 3.5% increase would be the maximum that could be applied, but that a significant portion of the owners would not rise to the ceiling.

The government claims it has always ruled out a simple, simple freeze on rents, after Prime Minister Elizabeth Bourne had already said it was a good, wrong idea. He points out that owners are also affected by inflation, with increased maintenance costs, or when they want to do energy renewal work in their homes.

Percy insists that wanting to freeze rents is a bad idea, because it would eliminate all housing supply.

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