Rents are expected to rise next year. What are tenants and landlords saying? – Present

According to INE data, in the last 12 months up to August, the average change in the price index, excluding housing, was 5.43%, a value that serves as the basis for the coefficient used for the annual rental update for the following yearunder the New Urban Lease Scheme (NRAU) and which represents an additional 5.43 euros for 100 euros of rent.

However, the actual value of the rent update will only be determined when, on September 12, the INE publishes the final data referring to the August 2022 CPI.

The 5.43% increase in rents in 2023, applicable in both urban and rural areas, follows the 0.43% increase recorded this year, following the 2021 freeze (following the negative variation of the index prices) and increases of 0.51% in 2020, 1.15% in 2019, 1.12% in 2018, 0.54% in 2017 and 0.16% in 2016.

What does the law say about rent increases?

By law, rental values ​​are generally subject to annual updates that are automatically applied based on inflation. The NRAU stipulates that the INE is responsible for determining the rent update coefficient, which must be included in a notice to be published in the Diário da República by October 30 of each year to take effect.

Only after publication in the Diário da República can landlords announce the rent increase to tenants, and the increase cannot actually take place until 30 days after this notice.

According to the law on the lease, the first update may be required one year after the entry into force of the contract, and the following one year after the previous update, the lessor having to communicate in writing, at least 30 days to the advance, the discount coefficient and the new income resulting from this calculation.

If not desired, owners are not required to apply this update.

Pre-1990 rents, however, were updated in November 2012, according to the NRAU, allowing you to raise older rents through a landlord-tenant negotiation process. If they have been subject to this extraordinary update mechanism, they are exempt from a new download.

The government says it is aware of the “concerns”

“The government is following the concerns that have been expressed on this subject, in particular by the various associations in the sector,” an official source from the Ministry of Infrastructure and Housing told Lusa.

“At the moment, the case is still under consideration,” he added.

Prime Minister António Costa has announced an extraordinary meeting of the Council of Ministers to be held next Monday to approve a family income support package, taking into account the effects of inflation.

Asked by Lusa whether these support measures could curb the rise in rents, the office of Pedro Nuno Santos did not give more details.

What do tenants think of rising rents?

The president of the Lisbon Tenants Association (AIL) has called an increase in rents due to inflation “unaffordable” and asks the government to create a “brake standard” that prevents the update from exceeding 1 % in 2023.

“If the value of inflation in order to increase rents is 5.43%, from our point of view, it is completely unaffordable for most families,” Romão Lavadinho told Lusa.

Declaring that the AIL does not accept that the updating of rents can be made taking into account the value of inflation that usually serves as a reference, Romão Lavadinho explained that this association defends that the increases do not exceed 1% .

“What we think is that the government should issue a curb rule to prevent increases from exceeding 1%,” he said, pointing out that this value was set taking into account the increase. salaries of 0.9% for the civil service in 2022 and that the AIL already in June defended this measure with the government.

For Romão Lavadinho, a 5% increase in rents “is unaffordable not only for low-income families, but for all families in general”.

“In some cases, that meant people had to pay 13 months’ rent. But that is not possible”, maintained the president of the AIL.

And the owners?

The associations of owners refuse the measures which stop the rise in the rents according to the indicator of inflation, estimating that it belongs to the government to create measures to face possible difficulties of the tenants.

Recalling that the rent discount coefficient “has been provided for in law” for many years, having never been modified, the president of the National Association of Landlords (ANP), António Frias Marques, sees no reason to that the owners do not apply it, knowing that they too are affected by the rise in the cost of living.

“If everything has gone up, why shouldn’t the rents also be updated?” We see no reason for this not to happen, ”António Frias Marques told Lusa, pointing out that, in a rent of 400 euros, the expected increase (taking into account the known inflation value) will be around 21 euros, the equivalent of around “half the price of a bottle of gas”.

In Lusa, Diana Ralha, from the Board of Directors of the Lisbon Owners Association, began by recalling that, in the universe of ALP partners, a minority are those who can make use of this discount coefficient rents, which, she pointed out, does not even take housing costs into account.

Given the general increase in prices, and taking into account the fact that “owners and landlords do not live in a bubble” and are also “affected” by high inflation, Diana Ralha believes that those who have contracts allowing them to update the value of the rents taking into account this coefficient, will do it.

However, he added, landlords are also ‘common sense’ people who will assess every situation because they don’t want to lose tenants with whom they have long-term relationships and who don’t cause them problems. .

On the possibility – defended by the Association of Tenants of Lisbon – that the government intervenes to freeze the increase in rents or establish ceilings lower than the value resulting from the coefficient provided for by law, both the ANP and the ALP are totally against this.

“We see no reason for this to happen”, a “freeze would be complicated” because everything “increases”, owners are also “faced with cost increases every year”, said António Frias Marques, who shot: “if you want to freeze, freeze, for example, the price of a bottle of gas”.

“A proposal to freeze or ‘small increase’ is tantamount to an invitation to decree the ruin of the owners”, declared the president of the ANP.

António Frias Marques also recalled that since 2015 the legislation is ready to grant income support to people who prove that they do not have the income to pay it, but it has never been regulated. “It is time to do it,” he said, stressing that it is up to the government to solve these social problems.

Although she believes that the updating of rents resulting from this coefficient will not cause social alarm, Diana Ralha argued, for her part, that it is up to the State to support tenants who may not be able to cope with increases.

In this context, he recalled the INE data which indicates that most lease contracts have an average rent of less than 400 euros.

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