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Government averts threat of market-set rents

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16:44 CET+01:00
A government memorandum has concluded that both public and private housing companies should negotiate rental fees with tenants based on a utility based system, rather than fees being market-oriented.

The government has been conducting a review into changes to the Swedish housing market affecting rental apartments.

Sweden's utility based value system for allocating rental housing – which takes an apartment's condition, location and the year it was built into consideration.

It also a system based on negotiated rents set by collective bargaining and those factors will remain, to the relief of the Swedish Union of Tenants (Hyresgästföreningen).

”Market-oriented rents would have been a catastrophe for the country's tenants,” Barbro Engman, chair of the organisation said in a press statement.

”With the current housing shortage across the country, it would have resulted in substantial increases in rental fees.”

Rental fees can still be negotiated with the same principles as before and following the government proposal private housing companies can also use the same process.

It means public housing companies consequently lose their roll in setting the standard for rental fees.

According to the government, the proposal brings a large-scale housing reform one step nearer in a bid to put the Swedish housing market on an improved course.

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