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HOUSING

Renting in Germany: Here’s what to know about changes in 2020

Rocketing rent costs are a big concern to many living in or planning to move to Germany. But there are some changes that could help ease the situation.

Published: 6 January 2020 13:51 CET
Renting in Germany: Here's what to know about changes in 2020
A man walking in Berlin. Photo: DPA

The cost of housing in Germany is in the spotlight as renters grapple with rising prices and a lack of new affordable homes.

So will there be any relief in 2020? From tighter rent controls to housing benefit boosts, these are the important changes and developments to know about.

READ ALSO: Everything that changes in Germany in 2020

Rent brake being tightened and extended

The so-called Mietpreisbremse or ‘rental price brake' is supposed to stop landlords in areas with strained housing markets from increasing rents by more than 10 percent than the local benchmark average when renting out to a new tenant.

In June 2015, Berlin became the first German state to implement the new regulation, and now there are a total of about 300 cities. There are, however, times when a landlord is exempt from the regulations, such as in the case of a new tenant moving in after extensive modernization or if previous tenants already paid in excess of the local rent average.

This year the law is being tightened and extended. In future, tenants who are paying more than they should will be able to claim back the overpaid rent retroactively, up to a period of 30 months. The prerequisite is that the tenant has notified the breach within this period after the start of the rental contract.

In fact, the rent brake, or the possibility for the federal states to impose one, is meant to expire at the end of 2020. However, the regulation has been extended until the end of 2025.

READ ALSO: Munich no longer most expensive city for renting in Germany

Berlin rent cap

Recently, we explained how a massive 1,749 flat-hunters queued outside to visit a reasonably-priced vacant Berlin apartment 12 hours after it was advertised online, a sign of the city's problematic housing situation.

But could that all be about to change? Well, city bosses hope so.

The controversial “rent cap” (Mietendeckel), which is due to be approved in the next month or two, is set to implement a five-year rent increase freeze in the capital.

It will mean around 1.5 million homes will have their rents frozen and capped at €9.80 for Kaltmiete (cold rent, or costs before utilities) per square meter.

The draft law states that landlords cannot charge rents higher than what the previous tenant paid and, if their rent is above the limit set out in a rent table (which depends on the age of the building and other factors) tenants can even apply to have it lowered.

Exceptions include social housing, owner-occupied flats, flats in halls of residence and apartments built since January 2014.

After the law gets the green light it will then be applied retroactively from June 18th, 2019, which means that any recent rental increases may be deemed as not valid.

READ ALSO: What you need to know about tax changes in Germany in 2020

Crack down on excessively high rents

A protest against high rents in Hamburg in 2019. Photo: DPA

Further plans are being put forward from German states in a bid to stop tenants being faced with extremely high rental costs.

In response to drafts submitted by the states of Bavaria and Schleswig-Holstein, the Bundesrat has put together bills aimed at strengthening the Economic Criminal Code and increasing the fines for those caught exploiting tenants.

These measures will be introduced into the Bundestag for debate.

Restrictions on converting rented apartments to private flats

Another draft law for the preservation of affordable rental housing is being put forward by the city states of Hamburg, Bremen and Berlin.

They want to abolish a loophole in the Planning and Building Law, which says the conversion of rented apartments into private homes is only possible if the apartments are sold to tenants during the first seven years of them living there.

In practice, however, the applicant states argue, tenants are not able to afford to the buy the apartments during those seven years. Therefore, the owners allow the period for tenants to buy the home to expire, and then they will be able to offer the home on the market.

That means that new owners then often take back the flat, declaring their own interests (Eigenbedarf) or increase rents after modernization. The bill was presented in the Bundesrat and will be discussed in the relevant committees.

Boost to housing benefit

People on low incomes have received an increase in housing benefit (Wohngeld), a state subsidy intended to ensure tenants can afford suitable housing.

READ ALSO: The big changes in Germany to expect in 2020

From January 1st, housing benefits increased by an average of about 30 percent. A two-person household, for example, now receives €190 per month instead of the previous €145.

In addition, as a result of the 2020 housing subsidy reform, around 180,000 more households are entitled to the subsidy than before.

From 2022, the housing allowance will then be regularly adjusted every two years to reflect current rent and income trends.

In 2021, the German government is also planning a further housing benefit increase, which will relieve low-income households of heating costs. They are set to rise as a result of the CO2 price increase under the climate protection programme.

Generally, in order to qualify for housing benefit, you cannot be receiving any other benefit payments, such as unemployment allowance.

Good-to-know for renters

When you're searching for a flat in Germany, you might find that landlords want to see a Schufa credit check – even during the apartment viewing. But fear not, it's fairly easy to obtain. Read our guide on how to obtain a Schufa here.

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READER INSIGHTS

How foreign residents in Germany are winning rent reductions

Rent is often the biggest expense for foreign residents in Germany. Even though there are rent controls in some cities, tenants can still be charged too much. Readers shared how they managed to get a rent reduction.

Published: 2 May 2024 14:57 CEST
How foreign residents in Germany are winning rent reductions

The Local asked readers whether they have tried to reduce their rents in Germany, and to what end. 

Of the readers who responded, nearly half said they had never tried to reduce their rent. Among the other half of respondents, many said they either wanted to reduce their rent or were currently in the process of trying to have it reduced. 

About 18 percent of respondents to our survey said they had successfully reduced their rents in Germany before.

Why do residents want rent reductions?

Germany notoriously has the lowest rate of home ownership in Europe, which has long been attributed to being a country with high real estate prices and relatively low rents.

But this means that a large number of German residents are directly affected by rising rents. Low-income individuals living in urban hubs where rents have been rising rapidly in recent years are particularly vulnerable.

According to Germany’s statistical office (Destatis), 11.8 percent of the population was overburdened by housing costs as of 2022 – meaning these households spent more than 40 percent of their income on housing.

Unsurprisingly, a number of readers cited inflation and cost-of-living increases as the primary reason they wanted to try for a rent reduction.

READ ALSO: How to grow your savings in Germany during high inflation

A couple of readers noted that their current rent prices are making their living costs too high.

Rothe, 29, who lives in Aachen, says she can’t bear her current rent but is stuck in a contract.

Similarly, Lucas, 35, who lives in Horb am Neckar said he wants to reduce his rent to balance his expenses following the recent cost-of-living hikes. He says he’s tried to negotiate with his landlord, who doesn’t care to do so.

While landlords are unlikely to grant a rent reduction based on inflation or cost-of-living increases, there are a few reasons you can legitimately demand a rent reduction in Germany.

Make sure your rent isn’t exceeding the price brake limit

The rent price brake (Mietpreisbremse) isn’t perfect, but it’s arguably Germany’s strongest protection for tenants against rising rents. 

It’s designed to prevent landlords from raising rents to ‘unreasonable’ levels, but with no central agency for enforcement, the burden falls on tenants to demand legal rents.

READ ALSO: German rent brake to be extended until 2029: What you need to know

Andrew, 62, successfully reduced the rent he pays for his flat in Berlin’s Gesundbrunnen area with the rent brake rule. After he realised the “rent was high for the location”,  he contacted his tenant’s association.

He thought that his landlord responded in a reasonable manner: “They thought the condition of the flat justified the higher rent and paid a friendly visit to point out the features,” Andrew said.

“We countered that the features were all quite old and that the previous tenants had been on a lower rate.”

Mieten runter "rents down"

The words “Rents down” are graffitied on the wall of a rental building. About 75% of Berlin rents are set illegally high, a legal expert told The Local. Photo: picture alliance/dpa | Monika Skolimowska

The rent brake prohibits landlords from setting rents more than 10 percent above a local average value, which is recorded in a local rent price index. You can find your local rent price index by searching for the German term “Mietspiegel”, along with the name of your city or region.

Here is one for Berlin, which allows you to calculate your rent index based on your current address and a few factors such as the area of your flat and how old the building is etc.

Andrew recommends joining a tenants’ union and using an online calculator to check if your rent is reasonable. He also says you should be prepared to negotiate and to compromise where necessary.

Gerson, 50, who lives in North Rhine-Westphalia, also found that his current rent was too high for his location. He says he is currently looking for a company that can assist him with the process to demand a rent reduction.

David, 57, in Berlin said he believes his rent is “illegally high” compared to other and he has hired a lawyer to go through the process of trying to get a rent reduction. 

There are also legal service providers that can help with renters’ issues in Germany, and some that even specialise in winning rent reductions with the rent price brake. You can find some of them through an online search. You may want to look for one that will initiate the process at no cost to you. Some will even complete the service with no cost to tenants, applying their fees instead to the landlords at fault in the event that they win a rent reduction.

READ ALSO: Why are Berlin rents soaring by 20 percent when there’s a rent brake?

It’s also worth noting that the rent price brake only applies to rental markets that are considered highly competitive. So it applies to most of Germany’s big cities, but may not apply in suburban or rural regions.

Overcharged by faulty measurements

Rents prices in Germany are usually calculated according to a price per metre of living space. Therefore, in some cases, it may be worth double checking that your living space has been calculated accurately.

One reader, who didn’t wish to be named, told The Local that he had previously reduced his rent for an apartment in Düsseldorf in this way.

“We had a small attic apartment with slanted walls,” the reader said. “The total square metres of the apartment were based on measurement from wall to wall. However, walls had to be straight to a height of at least 1.2 metres before the slanted side can begin [or else] the total square metres start from the point where the vertical height of 1.2 metres is available.”

After he learned about this requirement he measured the apartment, and found that his own rent had been based on a measurement of the floor plan, not the legally defined living space. Then he contacted his tenants’ association, which sent an architect to confirm the measurements.

Initially sceptical, his landlord sent another architect to check the measurements. But when it was confirmed, his rent was lowered accordingly. “Turned out that we had to pay for about 10 square metres less all in all,” the reader said.

This incident was 15 years ago, and these types of regulations can vary from region to region.

His advice to readers is to check up on the local regulations that may apply to your situation. 

In other cases, some renters have been able to negotiate rent reductions for other inconveniences – such as excessive noise, for example.

READ ALSO: How to get a rent reduction for problems in your German flat

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