Large landlords in Germany consider rent increases as inflation soars & More News Here

BERLIN, June 1 (Reuters) – Germany’s largest residential landlord Vonovia (VNAn.DE) will improve rents if excessive inflation charges persist, its chief govt officer mentioned, as shopper costs in Europe’s greatest financial system have reached the best stage in almost half a century.

“If inflation is permanently at four percent, rents will also have to rise accordingly each year in the future,” Rolf Buch, overseeing a portfolio of some 565,000 residences, advised enterprise day by day Handelsblatt in an interview printed on Wednesday. “We cannot pretend that inflation will not affect rents.”

Vonovia rival LEG (LEGn.DE), proprietor of about 166,000 flats, additionally mentioned inflation can be mirrored in rental charges if it persists. “The rental market will not decouple itself from the general price development,” an LEG spokesperson advised Reuters.

As in different European international locations, costs in Germany have risen sharply in latest months, pushed greater first by provide chain issues after the pandemic after which by the warfare in Ukraine.

Consumer costs elevated to eight.7% in May, a stage not seen because the winter of 1973/1974 through the first oil disaster. learn extra

Average rental costs at Vonovia elevated 3.1% in the primary quarter, Buch mentioned. He expects rising power costs to price tenants as much as two months’ rental charges per 12 months.

LEG elevated rents by a mean of two.7% in the primary quarter, based on the spokesperson.

It is a very delicate subject in Germany, the place rents have historically been comparatively secure over many a long time, resulting in a tradition the place middle-class households stay in rented houses all through their lives.

Inflation has turn out to be a priority for giant components of the inhabitants with 94% of Germans not anticipating costs to fall any time quickly and 56% anticipating costs to proceed to rise, a Forsa ballot confirmed on Wednesday.

German Chancellor Olaf Scholz on Wednesday known as on the federal government, commerce unions and employers to debate joint measures in opposition to excessive inflation.

“We need a targeted effort in a very unusual situation,” Scholz mentioned. Credit-financed subsidies weren’t an answer, he mentioned, in explicit as Germany plans to return to a constitutionally enshrined debt brake subsequent 12 months.

Reporting by Riham Alkousaa; Editing by Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

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