Tenants in Switzerland hit by another blow with rent prices to rise further
Swiss rents are set to increase further after the hike of reference rates was announced this week.
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After the Federal Housing Administration raised reference rates to 1.50 percent from June 3rd, another hike — this time to 1.75 percent — by the Swiss National Bank (SNB), will go into effect today.
After the Federal Housing Administation (BWO) announced in June that rents will go up by about 3 percent this year for tenants whose leases are based on the reference rate — about 54 percent of contracts overall — another increase is on the way.
The central bank announced on Thursday that it was raising the key interest rate further by 0.25 percentage points to 1.75 percent to counter "inflationary pressure, which has increased again over the medium term."
What does this mean for tenants?
“A rise in the key interest rate leads to a rise in mortgage rates and therefore also in the reference interest rate for rents,” according to SNB’s director Thomas Jordan.
It is not yet known by how much more the rents will rise due to the new reference rate, but it will put further pressure on the tenants already dealing will high costs amid a very tight housing market, especially in large cities.
What happens next?
Once the amount of the increase has been set, you will be informed, by registered letter, if your rent is about to go up.
The hike will not go into effect immediately, however.
The landlord can only up the rent once a year — either on the specific date mentioned in the lease, or the next possible termination / notice date.
The notice period in Switzerland is typically three months, which means landlords will be able to charge the higher rate from October 2023.
READ ALSO : When can my landlord legally increase the rent?
If you are not sure whether your rent increase or the amount of the hike are justified, or how you should dispute the raise, you can seek advice from your canton’s conciliation authority.
But tenants are not the only ones impacted by the hike.
If you are a current or potential homeowner, your mortgage rate (unless it is a fixed-term one) will go up as well.
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After the Federal Housing Administration raised reference rates to 1.50 percent from June 3rd, another hike — this time to 1.75 percent — by the Swiss National Bank (SNB), will go into effect today.
After the Federal Housing Administation (BWO) announced in June that rents will go up by about 3 percent this year for tenants whose leases are based on the reference rate — about 54 percent of contracts overall — another increase is on the way.
The central bank announced on Thursday that it was raising the key interest rate further by 0.25 percentage points to 1.75 percent to counter "inflationary pressure, which has increased again over the medium term."
What does this mean for tenants?
“A rise in the key interest rate leads to a rise in mortgage rates and therefore also in the reference interest rate for rents,” according to SNB’s director Thomas Jordan.
It is not yet known by how much more the rents will rise due to the new reference rate, but it will put further pressure on the tenants already dealing will high costs amid a very tight housing market, especially in large cities.
What happens next?
Once the amount of the increase has been set, you will be informed, by registered letter, if your rent is about to go up.
The hike will not go into effect immediately, however.
The landlord can only up the rent once a year — either on the specific date mentioned in the lease, or the next possible termination / notice date.
The notice period in Switzerland is typically three months, which means landlords will be able to charge the higher rate from October 2023.
READ ALSO : When can my landlord legally increase the rent?
If you are not sure whether your rent increase or the amount of the hike are justified, or how you should dispute the raise, you can seek advice from your canton’s conciliation authority.
But tenants are not the only ones impacted by the hike.
If you are a current or potential homeowner, your mortgage rate (unless it is a fixed-term one) will go up as well.
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