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CRIME

Sweden’s first case against an overpriced rental goes to court – two years after law change

For the first time, a Swedish landlord has been prosecuted for overcharging their tenant and subletting their apartment without permission from their own landlord.

Sweden's first case against an overpriced rental goes to court – two years after law change
The tenant was charged around 3,000 kronor more each month than the price allowed by law. Photo: Henrik Montgomery/TT

Sweden tightened its rules on subletting in October 2019, introducing a maximum two-year jail sentence for people found guilty of overcharging their tenants.

The landlord who is first to be prosecuted under the new laws is a man in his 40s, according to Hem & Hyra which was first to report on the case.

He was paying 6,527 kronor in monthly rent for the apartment in Hässelby, northern Stockholm, and the law states that a secondhand tenant or subletter should only be charged around 10-15 percent more than this (to cover bills and furniture). Instead, he allegedly charged at least two tenants 10,500 kronor.

The rules for people who own their apartment and sublet it are slightly different, since the base amount can be calculated based on what it would cost to get a new mortgage on the apartment, which means that subletting from someone who owns their apartment is often more expensive than subletting from someone who rents.

The case in Hässelby came to light after neighbours informed the property owner last winter that there were a lot of non-residents coming to and from the apartment. 

Then, the company that owns the apartment asked one neighbour to keep a log of who was living in the apartment and when moving companies were seen, which they then provided to police. Additional evidence included the advert for the sublet on classifieds site Blocket as well as text messages between the subletter and his tenants. The man denied the allegations when questioned by police.

As well as overcharging for the monthly rent, the charges allege that the landlord had not requested permission to sublet from the housing company, which is compulsory in Sweden. Secondhand tenants should always ask to see proof of this permission being granted, as well as a breakdown of the costs, to guard against illegal sublets.

The punishment for illegal sublets can include fines or even a jail sentence for the landlord, of up to two years.

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PROPERTY

EXPLAINED: Will other banks follow rate cut at Sweden’s state mortage company?

Sweden's state-owned mortgage provider SBAB on Tuesday cut rates across the board. Will the big banks follow suit?

EXPLAINED: Will other banks follow rate cut at Sweden's state mortage company?

How much did SBAB sink interest rates? 

The mortgage provider dropped interest rates on its variable mortgages by 0.15 percentage points to 4.62 percent. It dropped rates on mortages fixed between one and 10 years by between 0.10 percentage points and 0.25 percentage points.

“We know that the interest rate hikes of recent years have represented a major burden for many households, so we are pleased to be able to once again reduce our rates,” SBAB’s chief executive, Mikael Inglander, in a press message. “We dropped rates on mortgages fixed between one and five years at the start of July and now we’re dropping them across the board.”

Why is the mortgage provider sinking rates? 

Frida Bratt, a savings economist at Nordnet, said that SBAB’s decision meant that it expected Sweden’s Riksbank central bank to reduce its rates further when it is scheduled to make another rates decision in August. 

“My feeling is that SBAB has a tradition of following the current interest rate quite closely and sometimes to even jump a bit ahead of the curve,” she said.   

Christina Sahlberg, an economist at the price comparison side Compricer, said that she expected the other banks to follow SBAB’s example over the coming weeks and months. 

“I’m sure that the other banks are going to act now,” she told the TT newswire. “SBAB are always very good at adapting according to the market situation.” 

Will there be more reductions in mortgage rates to come? 

In the press statement, Inglander said that SBAB expected to continue reducing its rates as the Riksbank reduced its own key interest rate. 

“If the Riksbank sticks to what they’ve communicated — that is to say that they reduce rates further in 2024, then we are also going to make further reductions in rates for our customers,” he said. 

SBAB has reduced its flexible interest rate five time this year, bringing the total reduction to down by a total of 0.5 percentage points.

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