Read news from:
Austria
SHARE
COPY LINK

PROPERTY

Report: Hard up Swedes tap parents for flat cash

More than half of home-buyers over the past three years have been unable to finance the purchase on their own, with many seeking family help, according to new statistics.

Published: 6 June 2014 10:35 CEST
Report: Hard up Swedes tap parents for flat cash
Higher mortgage rates and tougher lending conditions have meant that more and more Swedes are seeking the help of relatives to finance their purchase, at levels unseen since the post-1990 crisis, according to a survey by the state-owned SBAB bank.
 
"The mortgage ceiling – only being able to borrow up to 85 percent of the market value, coupled with rising prices, require a fairly large down payment," said Tor Borg, chief economist at SBAB.
 
First-time buyers are those most affected by the situation.
 
"In most cases, parents come in with the down payment, alternatively friends," Borg said.
 
Parents are often also called in to help support loan applications, the SBAB report showed. 
 
"The downside is that you need to have someone who can help you. For those who do not have parents who can stump up it will be difficult. It is not enough to have a permanent job."
 
According to Borg, the housing market as a whole – with rising house prices, housing shortages and a rental market that is not working – is the root of the problem.
 
"If you want to take political action, it is perhaps here you should direct the focus, instead of simply having more stringent repayment requirements."
 
Hans Lind, a professor of real estate economics at the Royal Institute of Technology (KTH) in Stockholm, recognizes the picture painted by the SBAB report.
 
According to Lind, interviews with young people show that those who go to showings of small apartments, around half would rather be renting – if there was a functioning rental market.
 
Lind warns of problems for those who don't have parents with available resources.
 
"The question to ask is: those who do not have parents who own a home that has risen in value or who have other sources of money, where do they go? What are their opportunities in the market today?"
 
Lind argues that the solution lies in developing a greater range of housing that caters to broader groups than those with high incomes.
 
"I think the politicians are aware of this and I think they take it seriously too, but then there's a lot of conflicting objectives. Sometimes it feels like housing is not really given the necessary priority."
 
Some 36 percent of those who bought property during the years 2012 to 2014 had co-signatories on their loans. Meanwhile, the percentage of those needing help with the down payment rose from 6 percent in the period 2000-2004, to 24 percent in 2012-2014.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

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
Updated: 21 April 2024 08:12 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.

SHOW COMMENTS