Three reforms to tackle high rents – what they mean for tenants in tangible terms
The German government is taking new steps to make housing more expensive, as Federal Justice Minister Stephanie Hubig (SPD) pushes for stricter rental regulations. Despite the extension of the current Mietpreisbremse (rent control) until the end of 2029, loopholes in the system allow some landlords to bypass the rules, leaving tenants facing unexpected rent increases. The new measures are expected to come into effect in 2027.
One of the main priorities is indexed rents, which automatically increase with the inflation rate. These rents were rare in the past, but they have become more common in cities like Hamburg and Munich, where they account for 70% of new contracts. Hubg plans to set a cap on these increases at 3.5% annually, or matching the actual inflation rate if it is lower. This change will make future rent more predictable for tenants, but it may reduce landlords' profits during periods of high inflation.
Short-term rentals are also another target. Currently, contracts shorter than six months are exempt from rent control, allowing tenants to live in the same apartment for years without protection. According to the proposed rules, any tenant living in the same apartment for more than six months will be subject to rent set according to local rent levels. This aims to prevent landlords from using consecutive short contracts to circumvent regulations while still allowing flexibility for business travelers and short-term tenants.
Furnished apartments were another loophole, where landlords could charge high fees for furniture without transparency. Hubg's proposals require landlords to separate the rent of the apartment itself from the additional fees for furniture, setting a maximum limit for these fees at 5% of the net cold rent. For example, if the monthly rent is 1,000 euros, the furniture fee cannot exceed 50 euros, making furnished apartments fairer and less expensive for tenants.
Together, these reforms target the most common ways landlords circumvent rent controls, from indexed rents and short-term contracts to furnished apartments. The measures aim to give tenants more predictability in rent, reduce excessive increases, and make housing in Germany more affordable, while balancing the interests of landlords. If these changes are passed, they could reshape the rental market and curb rising rental costs in urban areas.