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Stockholm rents soar after new subletting law

Stockholm rents soar after new subletting law

Published: 08 Apr 2013 10:01 GMT+02:00
Updated: 08 Apr 2013 10:01 GMT+02:00

Rents for sublet apartments in Stockholm County have jumped by ten percent in the last year, according to figures compiled by the Svenska Dagbladet (SvD) newspaper.

And in the first quarter of 2013, the cost of subletting a one-bedroom flat has risen by 19 percent compared to last year to an average of 11,241 kronor ($1,740).

The findings are based on figures taken from Swedish buy-and-sell site Blocket.se, a site often used by Swedes looking to sublet their apartments, and also show that the number of listings of available flats has increased by 23.7 percent compared to the same period last year.

The phenomenon of rising prices and rising supply is unique, according to real estate professor Stellan Lundström of the Royal Institute of Technology (KTH).

"If the supply increases, prices should fall. But the high population density and people moving into Stockholm skew the housing market because demand continues to rise," he told SvD.

Last year, SvD set up a citizen reporting initiative entitled Hyreskollen allowing tenants in Stockholm to register information about their living costs.

In January, the paper revealed that many rents, nominally kept in check by Sweden's stringent rent control laws, were already unlawfully high.

READ ALSO: The Lowdown: Sweden's new subletting law

The old law obliged owners of flats in cooperative housing associations (bostadsrättsföreningar) to keep the sublet rent level with their association membership fees. It forbade them from increasing the rent in order to cover their mortgage costs.

A new law that took effect on February 1st gave apartment owners more flexibility in setting rents for sublets that were more in line with the actual costs of ownership.

The paper noted, however, that the numbers had been steadily on the up even before the rent control reform, which a representative from Blocket said could be due to Swedes' thriftiness prompted by the threat of recession spreading from the continent.

The head of the Swedish Tenants Union (Hyresgästföreningen) found the development worrying, however, explaining there would continue to be a housing shortage in Stockholm unless the pace of new housing construction in the capital region picked up.

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