Finland’s Largest Rental Firm Announces 12% Rent Increases

Finland’s largest residential rental firm, the Helsinki City Housing Company (Heka), has announced plans to raise rents by up to 12 percent from the beginning of next year.

The company previously said tenants would face a rent hike of 10 percent during this and next year.

The planned increase is significant, especially in comparison to the rises within the private rental market, although Heka still offers the cheapest rental properties.

However, Tiina Sandberg, chair of the housing committee of a Heka property in Puistola, described the situation as “worrying”, noting that Heka is passing on the servicing of its debts to tenants.

“One may ask whether housing is still affordable. Do we want a Helsinki where only the rich live,” Sandberg asked, adding that in her view Heka knows it can raise rents substantially without worrying about tenants changing landlords.

Heka apartments are allocated by the City of Helsinki’s housing services, with priority given to the homeless and other applicants of limited means and low income.

Heka: Rent hiked caused by rise in interest rates

Heka’s chair Juha Hakola, who took up the position at the beginning of this year, told Yle he did not want to criticise past decisions made by the board — such as tying loans to the Euribor interest rate.

“There is no point in second-guessing what should have been done differently previously. The important thing now is to look to the future and focus on how to put things right,” Hakola said.

Although he conceded that Heka has not successfully managed the rise in interest rates in recent years, he noted that the increases were unexpected and unprecedented.

The rise in interest rates is the root cause of the now-announced increase in rents, Hakola said.

“There is no misconduct or wrongdoing involved, and therefore no need to seek out those liable and responsible. This is the situation resulting from the rapid rise in interest rates,” he added.

Source : Yle