Norway’s government rules out a temporary rent cap
A temporary rent cap to help protect tenants against steep increases isn’t being considered by the government. Still, a review of the property market will come later, the Norwegian government has told The Local.
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Norway’s government will not consider implementing a temporary rent cap to protect tenants, the Ministry for Local Government and Regional Development has told The Local.
Landlords in Norway can raise rent prices in line with the consumer price index (CPI), although there are different rules for long-term tenants. Prices in Norway rose 6.5 percent in August compared to the same month the year before, the latest figures from Statistics Norway show.
Rising prices have had knock-on effects for rent too. During the second quarter, the cost of renting in Norway’s four biggest cities rose 4.2 percent compared to a year ago.
As prices have risen across Europe, several countries, including Denmark, France and Spain, have opted to introduce temporary limits on rent increases.
Jardar Sørvoll & Kim Astrup, both researchers at BOVEL, the centre of housing and welfare research at Oslo Metropolitan University, who specialise in the Norwegian property market, previously told The Local that they believed a temporary cap would’ve been suitable for Norway.
“In normal circumstances, it is a good idea that there is a legal mechanism in place that allows landlords to adjust rents annually to keep up with prices. However, in periods with exceptional levels of inflation, there is a case to be made for introducing a cap on rents to protect tenants. We are not opposed to a sensible temporary cap on rents given the current difficult situation for many tenants,” the researchers told The Local.
They believe that a temporary cap should be introduced because most tenants’ wage increases are not keeping up with current inflation, leaving them worse off in real terms. The researchers told The Local that a new rent cap would represent a burden-sharing exercise between tenants and landlords.
READ MORE: Should Norway introduce a temporary cap on rent increases?
However, the Norwegian government have ruled out a temporary rent cap, arguing that current laws do enough to protect tenants against rising costs.
“Introducing a temporary cap on rental increases is a drastic measure. The rent must cover the landlords’ expenses, which are also rising. I therefore find it wise to allow the landlords to set the rent, within reason,” Minister of Local Government and Regional Development, Sigbjørn Gjelsvik, told The Local, adding:
“In line with the Tenancy Act, it is not permitted to charge an unreasonably high rent compared to similar property on similar terms. Now that many are worried about high expenses, I encourage landlords to show moderation and not increase the rent if they can.”
Gjelsvikm did note, however, that Norway’s rental market was currently under more pressure than usual.
“The Norwegian rental market works well in many ways, but we are now in a situation where the rental prices are under more pressure than usual. The students are back after two years of corona restrictions, and the prices in society rise in general,” Gjelsvikm said.
In the longer term, the government will present more policies aimed at the rental market in the next couple of years.
“The government will present our housing politics in a white paper to the Parliament in 2024. In this process, we will take a closer look at the challenges in the rental market,” Gjelsvikm said.
The minister said that the government wanted to work together with tenants and landlords to ensure the safety and emergency exit regulations were properly met and that the government wanted to reduce student housing queues and facilitate more homes being built to ease pressure on the market.
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Norway’s government will not consider implementing a temporary rent cap to protect tenants, the Ministry for Local Government and Regional Development has told The Local.
Landlords in Norway can raise rent prices in line with the consumer price index (CPI), although there are different rules for long-term tenants. Prices in Norway rose 6.5 percent in August compared to the same month the year before, the latest figures from Statistics Norway show.
Rising prices have had knock-on effects for rent too. During the second quarter, the cost of renting in Norway’s four biggest cities rose 4.2 percent compared to a year ago.
As prices have risen across Europe, several countries, including Denmark, France and Spain, have opted to introduce temporary limits on rent increases.
Jardar Sørvoll & Kim Astrup, both researchers at BOVEL, the centre of housing and welfare research at Oslo Metropolitan University, who specialise in the Norwegian property market, previously told The Local that they believed a temporary cap would’ve been suitable for Norway.
“In normal circumstances, it is a good idea that there is a legal mechanism in place that allows landlords to adjust rents annually to keep up with prices. However, in periods with exceptional levels of inflation, there is a case to be made for introducing a cap on rents to protect tenants. We are not opposed to a sensible temporary cap on rents given the current difficult situation for many tenants,” the researchers told The Local.
They believe that a temporary cap should be introduced because most tenants’ wage increases are not keeping up with current inflation, leaving them worse off in real terms. The researchers told The Local that a new rent cap would represent a burden-sharing exercise between tenants and landlords.
READ MORE: Should Norway introduce a temporary cap on rent increases?
However, the Norwegian government have ruled out a temporary rent cap, arguing that current laws do enough to protect tenants against rising costs.
“Introducing a temporary cap on rental increases is a drastic measure. The rent must cover the landlords’ expenses, which are also rising. I therefore find it wise to allow the landlords to set the rent, within reason,” Minister of Local Government and Regional Development, Sigbjørn Gjelsvik, told The Local, adding:
“In line with the Tenancy Act, it is not permitted to charge an unreasonably high rent compared to similar property on similar terms. Now that many are worried about high expenses, I encourage landlords to show moderation and not increase the rent if they can.”
Gjelsvikm did note, however, that Norway’s rental market was currently under more pressure than usual.
“The Norwegian rental market works well in many ways, but we are now in a situation where the rental prices are under more pressure than usual. The students are back after two years of corona restrictions, and the prices in society rise in general,” Gjelsvikm said.
In the longer term, the government will present more policies aimed at the rental market in the next couple of years.
“The government will present our housing politics in a white paper to the Parliament in 2024. In this process, we will take a closer look at the challenges in the rental market,” Gjelsvikm said.
The minister said that the government wanted to work together with tenants and landlords to ensure the safety and emergency exit regulations were properly met and that the government wanted to reduce student housing queues and facilitate more homes being built to ease pressure on the market.
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