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How to buy a home after getting a job in Sweden

Finding a job can be tough for non-Swedes but this process often pales in comparison to the challenge of finding a place to live. With the rental market the mess it is, The Local's Tara Sonnorp looks at whether buying is an option.

Published: 19 August 2013 11:11 CEST
How to buy a home after getting a job in Sweden
Can foreign professionals in Sweden buy a home?

Sweden's still-heavily regulated rental market was designed for another era, one where cities like Stockholm did not have to attract foreign talent to keep afloat in the globalized market place. Getting a first-hand rental contract (hyresrätt) is impossible unless you turn to the black market, which many do despite no offer of any legal protection whatsoever.

The legal rental market is notoriously difficult to enter and despite recent changes the sub-letting laws, it remains tough to find an apartment that you can count on keeping for any length of time.

RELATED: Top home buying tips for expats in Sweden

When Helena Wiseman moved from England back to her native Sweden with her Australian husband Andrew, the couple was delighted to find their bank in Sweden had an international wing to help them relocate.

“We were thrilled to find that they now had a whole section set up to help returning ex-pats,” Helena tells The Local. “Finally someone I could talk to, who understood the challenges and assured us that it would be no trouble to arrange a mortgage.”

SEE ALSO: Find your next home with The Local's Rentals Section

The couple were told to get a deposit in order, and given advice on what documentation they should take back to Sweden with them to make the transition smoother. The seemingly smooth sailing, however, proved to be an illusion once they set foot on Swedish soil.

“Once we finally found our dream home, it was a nightmare. Even though we were able to raise a 35 percent deposit the bank would not lend to us unless my father agreed to guarantee the loan,” Helena, who is in her forties, recalls.

“We were devastated. It is somewhat humiliating at our stage in life, to be forced to turn, cap in hand, to your parents in order to move back to Sweden.”

SEE ALSO: Check out the latest home listings in The Local's Property Section

While renting at first is almost a must, the entire property hunt can be particularly taxing for families. Relocation agents are able to find properties, but stability remains an issue. Many families find that they need to move home at least once during a two-year contract in Sweden because to the families they have rented from return unexpectedly.

Certain foreign companies with Stockholm offices even make a point of mentioning the rental market hell to any staff eyeing a vacancy in the Swedish office.

With politicians concerned that the housing market is cramping Stockholm’s ability to expand and attract foreign expertise, many professionals contemplating a move to the Swedish capital consider buying instead.

But how easy is it as a newly arrived ex-pat or even a returning native, to secure a loan without a longstanding credit history here?

SEE ALSO: Get the latest exchange rates and transfer money on The Local's Currency page

“We welcome ex-pat customers,” Danske Bank spokesman Stefan Frodig tells The Local, but added that opening a checking account and securing credit were miles apart.

“In theory, the bank holds the property as security but the last thing we want is to be left with the house, we want to be sure that our customers can make their payments and remain in their homes,” he says.

SEE ALSO: Click here for the latest listings for jobs in Sweden

In the wake of the sub-prime lending scandal, and with tougher regulations to prevent money-laundering, banks are pretty tied when it comes to how much risk they can take.

With little or no credit history in Sweden, a foreign professional must find other ways to prove their credit clout.

While every situation is different, and banks are reluctant to make blanket statements about foreigners' chances of securing a mortgage, The Local has nevertheless compiled a list of seven tips for foreigners looking to buy a home in Sweden.

Tara Sonnorp

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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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