Things to know about the rent freeze and letting property in Hamburg

What the concept of rent control means for your letting in Hamburg

If rents in a certain region rise significantly faster than the average, if the average rent in that region is significantly higher than the average for Germany as a whole, or if demand drastically exceeds the supply of property, the Tenancy Law Amendment Act (Mietrechtsnovellierungsgesetz) legitimises the respective federal state to introduce a rent freeze, which is initially limited to 5 years. Even in phases of strong population growth that are not met with sufficient newly created living space, the necessary basis for the rent freeze is in place. The regions affected are mostly economic centres, large cities and metropolises.

By spring 2018, the state governments of all federal states, with the exception of Saxony, Saxony-Anhalt, Saarland and Mecklenburg-Western Pomerania, had introduced a rent freeze. In selected cities in the affected federal states, including Hamburg, the monthly rent for a newly let house or flat may only be a maximum of ten per cent above the local comparative rent. Newly concluded rental agreements that include an index-linked or graduated rent are also affected: In a graduated rental agreement, both the initial rent and the increase after the respective interval must be within ten per cent of the current local comparative rent at the relevant times. In the case of index-linked leases, on the other hand, only the initial rent must be taken into account, as the rent trend is based on the development of the consumer price index of the Federal Statistical Office.

Conversely, this means that existing tenancy agreements are not affected by the rent freeze - as a landlord, you are not obliged to subsequently reduce the rent for your house or flats. Contracts concluded before the rent freeze came into force with graduated rent increases also remain unaffected.

Exceptions when letting: The rent freeze does not apply in these cases

Even for newly concluded rental agreements in regions with rent control, rents above the ten per cent horizon may be permissible if one of the following conditions is met for your flats or house:

At the end of a tenancy, you as the landlord can demand an amount for the subsequent rent that corresponds to the previous amount, even if it is higher than the local comparative rent plus the tolerance.

The same applies if you wish to let a property that has been used and let for the first time since 1 October 2014. As a rule, these are new builds and it is assumed that the residential value here is categorically higher than the local comparative rent, which may also be partially made up of the prices of older properties.

Modernisations are also a special case. If you have carried out extensive measures that cost at least one third of the value of a comparable new-build property, the restrictions imposed by the rent cap do not apply.

Also worth knowing: The rent freeze should not be confused with the rent cap introduced in some areas in May 2013, which states that rents may not increase by more than 15 per cent within a period of three years. In this context, different guidelines and conditions apply to the rent cap.

Engel & Völkers Hamburg Elbe is your answer to all rental questions

Would you like to rent out a house or flats in Hamburg, but do you find it too time-consuming to deal with tenancy law? Engel & Völkers Hamburg Elbe is your real estate agent of choice, offering competent professional advice and complete letting support. Trained experts in the field of tenancy and building law will analyse your initial situation and, based on this, determine the ideal letting model for your property. An extensive international network of contacts enables us to quickly find suitable tenants with whom you can look forward to a long and peaceful letting relationship. It goes without saying that we take care of formal correspondence, drawing up professional tenancy agreements and organising property viewings for you.

If you have any questions about selling and letting houses and flats in Hamburg, please contact your estate agent Engel & Völkers Hamburg Elbe. You can reach us by phone, e-mail or in person at one of our branches. We look forward to hearing from you!