The price rally has continued in almost every area in the new year. However, signs of changes in the other direction can be seen in the case of rental prices. During the last month, more and more landlords have wanted to lower their rent (on average by 50 euros).
Last year, there was an increase in the price level on the rental market, especially in the summer period. The survey conducted among landlords and brokers in autumn also revealed that half of the owners had already raised the rent or were planning to do so during 2022 (Norstat and Rendin survey, September to October 2022).
‘In the last 50 days or so, however, we have noticed a greater interest on the part of landlords in how to correctly formalise the reduction of the monthly rent,’ says Alain Aun, CEO and co-founder of the secure rental agreement platform Rendin.
Aun explains that based on the data of users who have already prepared an annex to the rental agreement on the Rendin platform, it can be said that on average, the rent is reduced by 50 euros.
‘Nearly 20% of them have prepared a temporary annex, with which some landlords try to compensate the tenant for the expensive heating period. The vast majority, 80% of landlords, have decided in favour of an agreement entered into for an unspecified term, i.e. the lower rent is valid for an indefinite period.’
He adds that people who signed the agreement years ago and did not raise their rent during the peak season of last year have not reduced rent this year either. In other words, rent prices are still higher than, for example, three years ago.
Fortunately, many owners care about a good long-term rental relationship. A reliable and exemplary tenant is always more valuable than earning a slightly higher rental income. ‘For example, introducing a very steep Euribor increase in the rental price is not something that tenants can tolerate, as other monthly expenses are still exponentially higher compared to even a year ago,’ warns the head of Rendin.
‘Landlords being flexible with their prices means lower income, but in many cases, it is clearly the best strategy. The worst-case scenario for a landlord is to put the tenant in a situation where the latter simply stops paying rent and utilities because their income is not enough to cover their living expenses.’
Read more: The biggest rental disputes in 2022
Lia Siht, the Head of Legal and Compliance and lawyer of Rendin, gives some recommendations:
the rent reduction agreement must be formalised in writing as an annex to the rental agreement;
the annex must include either the number of the original agreement or a reference to the agreement (for example, a rental agreement between A and B, concluded on X date);
the law does not prescribe a specific form, so it can be formalised in a free format to indicate that the parties have agreed on a specific date from which the rent will be reduced by a certain amount or percentage;
if the rent reduction is temporary, the validity period must be specified.