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Sweden looks to make subletting flats easier

Sweden looks to make subletting flats easier

Published: 30 Mar 2012 13:24 GMT+02:00
Updated: 30 Mar 2012 13:24 GMT+02:00

Sweden is looking at loosening current restrictions facing flat owners who want to sublet their apartments in an effort to help ease the current housing crunch in large cities.

Currently, owners of tenant-owner apartment (bostadsrättlägenhet) in Sweden must first request permission from the board of the local housing association (bostadsrättsföreningen) before subletting a flat.

Furthermore, flat owners aren't free to charge whatever rent they'd like to prospective tenants, but instead can only charge what is considered "reasonable" rather than a rent that is in light with actual costs of ownership.

But a government inquiry submitted to housing minister Stefan Attefall on Thursday suggests that rules be changed to allow flat owners to set rents as they see fit.

The inquiry also suggests scrapping the need for owners to seek approval from their housing association before subletting.

"The housing shortage can't be built away overnight. We need therefore to make use of the housing we already have in a smarter way by creating a clear and transparent sublet market which works for both those who rent out [their flats] and those who rent," Attefall said in a statement.

The findings come from an inquiry launched in December 2011 in order to look at what sort of changes could be made to the residential rental market in Sweden in order to encourage people to rent out their homes.

Another measure included in the inquiry is a shortening of the notice period tenants are required to give their landlord before they plan to move out.

It is hoped that the proposed changes will make subletting more attractive to apartment owners, who may then be moved to rent out their flats to others who find it harder to enter the housing market by obtaining a first-hand rental contract of by purchasing a home of their own.

It remains unclear, however, exactly how many un- or under-utilized apartments may exist that could more easily be rented out once the proposed changes are enacted.

"We've looked at a study from the Stockholm Chamber of Commerce from 2010. That showed there to be a decent potential in Stockholm. But other sources look less promising," said Per Anders Bergendahl, who led the inquiry, to the TT news agency.

"There is still a side market where there are no contacts and the rents charged are very high."

In order to prevent increased speculative investment in residential real estate, the inquiry also proposes capping the length of time a flat can be sublet to five years, at which time flat owners would be required to wait another two years before subletting their flats again.

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Your comments about this article

13:48 March 30, 2012 by EP
It's about time, but I wouldn't hold my breath as to when this will be done. They'll need about 1 million meetings before deciding on something ...
14:16 March 30, 2012 by Abe L
Indeed, what took them this long?

It seems that on more and more fronts, Sweden is realizing that their 'unique' approach to a lot of matters simply doesn't work.

I have no other words for it then calling it retarded that an apartment I own, I can't rent out without asking someone else for approval and then get restricted in the amount of money I can charge for it. Aside from the fact that you usually don't get that permission or only for a very limited amount of time, such as 1 year.
14:41 March 30, 2012 by MiaM
getting a permission to sublett your apartment is not really a big problem, unless your Tenant's surname is Abdul Karim or Popovich...then, you can just forget it!
14:42 March 30, 2012 by Mib
Agree with the part of removing the ceiling that someone can charge. let the market decide for the sub-let market.

In terms of permission...again I agree as long as there are rules etc to protect homeowners ie. if the owner of an apartment above me rents it out to a group of University students that party all the time etc, then there shold be rules/penalites/notice period that the Housing Association can impose to stop the noise. You can imagine...you send severl amillion on a nice apartment and then the neigbouring apartment is rented out to a noisy family/group etc. The owners living in their own apartmet shoul dhave some protection
14:57 March 30, 2012 by dstergiou
@mib

The rules should be in place, but they don't have anything to do with renting. You bring up the example of noisy university students (which is legit), but what if the students instead of renting the apartment, they buy the apartment?

What laws/rules are in place to protect the owners of the adjacent apartments? If there are laws/rules in place, they exact same can be used to protect against renting to "inappropriate" people
15:04 March 30, 2012 by engagebrain
No this is a very bad idea - flats work because the occupants are also the owners and they have a real interest in keeping the communal areas etc functional.

At present renting for a year or two is generally approved by the board, so this is not such a great problem.

There are two reasons why finding a rental flat in Stockholm is very difficult (a) primary tenants illegally sublet and (b) more flats need to be built. These proposals do not address the real problems but will break something thats works well.
16:27 March 30, 2012 by hatim
With housing crisis Stockholm does not even deserves to be called capital of Sweden let alone Scandinavia.

How people who do nothing about it get into office is beyond me.
19:17 March 30, 2012 by suziezed
Here in Victoria, British Columbia, Canada where I live whether or not you can rent out an apartment you own is governed by the strata council rules (a group made up of owners of units) of that particular building. Some prohibit renting, some allow all units to be rented and others allow a percentage to be rented. The council has no say in how much you charge the tenant but most ask that they be informed of who the tenant is so that they have some idea of who is living in the unit.

Presently we seem to have an overabundance of new condominium (apartment) buildings but I would guess that most of these new buildings will not allow rentals. Whether it is true or not, buildings that allow all units to be rented are perceived of being of less value in real estate terms than those that do not allow rentals.

Are there no purpose built apartment buildings in Stockholm or Sweden in general - is every apartment owned? Here in Victoria there has been little incentive for developers to build rental buildings versus owned but hopefully that will change in the future. We too have a very low vacancy rate which makes it difficult for students particularly to find housing but I don't think it's as bad as Sweden by any means.
06:14 April 1, 2012 by brissiedan
@engagebrain,

Please do as your name says! The main reason for the 'black market' that currently exists is because of restrictive rent controls. Ultimately a free and open market is the only way supply will meet demand.

No developer will want to build new apartments in an environment where imposed restrictions will not allow them a descent return on their investment.
10:15 April 1, 2012 by procrustes
Ever wonder how slums happen?

Ever wonder why buildings are allowed to deteriorate?

This is how: owner rents out his flat, then a flat next door opens up for sale, single owner buys and rents it, too, then after a few iterations our real estate investor becomes a landlord, and as the building ages and maintenance costs rear their ugly head those costs are eschewed in favor of profit transmogrifying our landlord into a slumlord. Owner - Investor - Landlord - Slumlord.

Rather than control rental amounts/lease periods, a mandatory carve-out of rental income into an escrow account usable only for maintenance may be an answer. In any case, loosening rental regulations has always proven to be a step in the wrong direction.

After mucking-up Sweden's healthcare system, I wondered what the Moderates would next target for wealth aggregation. Now I know.
15:31 April 1, 2012 by Spuds MacKenzie
@engagebrain You said it perfectly! The way it works now is perfect.
16:26 April 1, 2012 by EtoileBrilliant
I'm surprised no one has pointed out the disparity between apartment and home owners. If you own a villa you can do what you like, if you own an apartment your hands are tied.

Nothing changes vis a vis the association. Same as before, if your tenant is an anti-social bastard, the association can force you to vacate it.

I, for one, would like to buy an apartment for my children to have in 10 years time and rent it out until they need it. I don't see anything immoral in that.
23:51 April 1, 2012 by engagebrain
re EtoileBrilliant

1) a flat has immediate neighbours, above,below and on each side plus shared facilities. A house does not require this level of interaction. Bad or out of control neighbours in a flat are a serious social menace.

2) so buy the kids a house.

3) while you rent out your flat, for 10 years, I assume that you will make no contribution to the running/maintenance of the flats - basically you want to freeload. Enough freeloaders create a downward spiral. As a previous post noted, in Canada owner occupied blocks are more desirable.
08:34 April 2, 2012 by jomamas
As long as people are not hurting each other or doing something immoral, why on earth would you need government permission to do something???
12:14 April 2, 2012 by cogito
Because in Sweden everything is forbidden except what the state permits.

In most democratic nations, it's the other way around.
14:31 April 2, 2012 by lucia_
And what are the options for a single mother with one or two kids working as a nurse or teacher to find a suitable living place in Stockholm?

She cannot buy an appartment (the salary is too low), she cannot get a first hand contract because her parents did not put her in the queue when she was born. So she just finds appartments on the black market where the owners ask for 12000kr for a 2 room appartment without making a legal contract.. Or she finds a room somewere in an appartment .. not really a suitable location for her children. Not mentioning that she has to move from appartment to appartment and the kids have to move from dagis to dagis because she can get a place to live for only max 1 year... Also the persons putting anouncements on blocket do not respond to your emails, they close the conversation when they hear you have childrens, you are foreigner or that you work as a nurse.

When you have the belly full you do not understand the hungry people. It is easy to say that this is not the solution and the solution will be to make new appartments.. but it does not work like that. There are some appartments beeing built, but for one of those there are minimum 500 people in the queue ...
15:02 May 9, 2012 by blitz459
Agreed. The current system clearly is designed to protect the interests of wealthy/well-off people who are the least in need of such price breaks. Those who would benefit the most by such rent controls are the least likely to ever find an apartment that actually abides by them. Rent control in Stockholm=JOKE!
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