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Inflation: cost trap index-linked rent

Dec 1, 20222 min read


Many tenants are currently facing rent increases. One example is a couple from Hamburg who have to pay almost 10 percent more rent due to the index-linked rent. A problem that also threatens many other tenants.

9.99 percent - that's the rent increase that a retired couple from Hamburg now have to pay. They have an index-linked rent. This entitles their landlord to increase the rent even if it is not in line with the local rent index.

What exactly is an index-linked rent?

The term "index-linked rent" refers to an agreement in the tenancy agreement. This states that landlords may increase the rent once every 12 months as soon as consumer prices rise. The consumer price index of the Federal Statistical Office is decisive and not - as is usually the case - the local rent index. The problem: while the consumer price index has been at 1 to 2 percent for years, the inflation rate in November 2022 was around 10 percent. With consequences for hundreds of thousands of tenants with index-linked rental agreements. They now face the threat of drastic rent increases.

Rent increases of 10 percent are not uncommon

The couple from Hamburg are also affected. The pensioners live in 92 square meters in the Niendorf district of Hamburg and will have to pay around 123 euros more rent in future. This corresponds to a net rent increase of almost 10 percent. A difficult situation for the couple: "We're trapped," says the husband. He continues: "We have no reserves and the housing market offers no alternatives." Moving would be even more expensive than the rent increase, the pensioner continues.

A businessman from Hamburg is also affected. He moved into a new apartment with his wife and child just a year ago - and received the rent increase shortly afterwards. "We had no choice, all the contracts in question were index-linked rents," says the family man. The problem: there is currently no legal recourse against the rent increases. Stefan Schmalfeldt from the Hamburg Tenants' Association also complains about this. "We fear that social peace in the country is at risk and are calling for a cap on index-linked rents." Schmalfeldt advises affected tenants to pay the higher rent. Otherwise there is a risk of termination.

If your landlord also increases the rent and refers to rising consumer prices, you should have your tenancy agreement checked by a lawyer. The rent increase often does not correspond to the agreement in the tenancy agreement.

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