Reference rate signals lower Swiss rents
Residents renting accommodation in Switzerland can apply for a reduction in rents after the federal housing office (BWO) announced on Monday that it is lowering its benchmark reference rate for rents by 0.25 percentage points to two percent.
The new rate, at a record low level, is set to take effect on Tuesday, the BWO said.
The reduction marks the first change in the reference rate in15 months, reflecting continuing low mortgage rates for property owners in Switzerland.
In principle, renters can request a reduction in rents of 2.91 percent because of the change.
The rental reference rate is established according to the average of mortgage rates determined on a quarterly basis.
While renters can normally seek reductions in their leases, rents can otherwise be raised or lowered if there were other factors that came into play before the reference rate changed, the federal housing office said.
Such factors could include an increase in the cost of building maintenance, for example.
The rental reference rate is set every three months, with the next setting scheduled for December 2nd.
The Swiss tenant’s association Asloca (known in German by the acronym SMV) said the rock-bottom interest rates are benefiting renters.
But it noted that while building owners have seen record low rates since 2009, rents have actually risen three percent in the past four years, with a let-up only over the past year.
Only 15 percent of renters have actually benefited from a drop in rents, it noted.
And the reductions are more than offset by hefty rent increases made when renters change (and it is possible for landlords to to establish new rents).
Reductions in rents are not made automatically, Asloca said.
Renters must make a request in writing.
The Swiss tenant’s association offers free advice on how to proceed.
Related link (in German, French and Italian): http://www.smv-asloca-asi.ch/