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Stockholm rents soar after new subletting law

Prices for subletting a flat in central Stockholm have jumped as much as 20 percent following recent changes to Sweden's subletting laws, according to new figures compiled by a Swedish newspaper.

Published: 8 April 2013 10:01 CEST
Stockholm rents soar after new subletting law

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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PROPERTY

INTERVIEW: ‘Most foreigners in Sweden don’t know they can get back excess rent’

In Sweden, people subletting apartments are not allowed to charge more in rent than they themselves pay. But foreign subtenants don't always know this. We asked Roland Sjölin, lawyer at the Swedish Tenants' Association, about how to get back excess rent.

Published: 18 April 2024 15:19 CEST
INTERVIEW: 'Most foreigners in Sweden don't know they can get back excess rent'

More and more of the people asking the Swedish Tenants’ Association, Hyresgästföreningen in Swedish, for help with excess rent are foreigners, Sjölin told The Local in an interview.

“The problem is that if you’re coming from another country, and you’re subletting an apartment, you’re probably not familiar with the rules in Sweden, because in other countries, it might be okay to overcharge your tenants.” 

He said that clients from India in particular seeking help from the association were now “very common”. 

“Many people come here to work as engineers in the IT sector and then have to rent somewhere,” he said, adding that as a group Indians appeared to be “very aware of their rights.”

Sweden’s rental sector is heavily regulated, with first hand contracts negotiated between landlords and the Tenants’ Association, and the rent that can be charged for second-hand contracts limited to only a small fraction above what the first-hand renter pays. 

“You’re not allowed to make any profit subletting an apartment in Sweden,” Sjölin explains. “You can only charge the subletting tenant the same rent as you [the first-hand tenant] are paying to your landlord, and then you can add the costs for internet and electricity, and perhaps a parking lot, if that is included.” 

Tenants’ Association lawyer Roland Sjölin. Photo: supplied.

You can also add a påslag or “markup”, if you are renting out the apartment fully furnished, but this cannot exceed more than 15 percent of the rent. 

That doesn’t mean that most landlords follow the law. The competition for rental apartments, especially in Stockholm, is so intense, that unscrupulous sublet landlords often try to get away with charging well over the legal amount, charging what is known in Sweden as ockerhyra, or “excess rent” and hoping that their tenants are too desperate to complain.  

What many foreigners do not realise is that even after the rental period is over, they can still get back any excess rent they have paid by applying to the Rental Board or Hyresnämnden, which functions like a court judging rental disputes. 

“If you have the evidence then it’s fairly easy,” Sjölin said. “I get a new case every second week on repayment of unfair rent, and I think that I win most of them.” 

“Nowadays, you can get paid back excess rent up to 24 months back in time, so people tend to get more money,” he added. “In some cases, they can get 200,000 kronor. In other cases, perhaps it’s only 30,000 kronor or 60,000 kronor. It depends on how long you have rented the apartment, and how excessive the rent you’ve been paying has been.”

The first step is to establish what would have been a fair rent, either by asking your landlord what they themselves pay directly or by checking with the Tenants’ Association.

“Because we negotiate most rents in Sweden, we normally know what the firsthand rent is,” Sjölin explained.

Then you need to collect together your evidence.

“It’s a good thing to have a written contract and also papers from your bank showing that you paid rent every month, and perhaps photographs of the apartment, so the rental board can get an idea of the apartment you were renting and what would be a fair rent, and also the termination for the contract so you can show the court how long you’ve been living in the apartment.” 

But Sjölin underlined that since Sweden has free burden of evidence, none of this is essential. 

“Even if you’ve been paying in cash, if you have witnesses who can testify what you were paying each month, you still have a chance of getting your money back. It’s a bit more tricky, but I’ve won two cases like that this year.” 

People in Sweden, he explained, tend to wait until the rental period is over before seeking to get paid back excess rent rather than challenging their landlord while they are still living in the apartment. 

“You don’t have any legal protection for your home for the first two years, so if you bring the matter up with the person you’re renting the apartment from you risk losing your contract and having to move out, so most people wait until they’re supposed to move anyway,” he said.

If you apply to the rental board for a refund close to the day you move out, you can then make your landlord pay back all excess rent paid in the 24 months leading up to the date you contacted the rental board.

If you are a member of the Tenants’ Association, you can contact them and ask for help with your application, but there are also specialist companies, like Orimlig Hyra AB who will buy your case off you and give you a refund within 48 hours, saving you a long wait in exchange for a cut of the money reclaimed. 

Sjölin said that the rental board normally took about 8 months to come to a judgement, but that if the person with the first hand contract appeals, that could extend the waiting time by between six months and a year.

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