Are you a tenant? Get ready for the rent increase in 2024

If you are experiencing financial problems and seeking solutions, contact Poupança no Minuto to help you with credit intermediation or insurance mediation. To better understand what to expect from leasing in 2024, keep reading next.

Landlords confess to denouncing contracts in case of rent freeze.

According to a survey conducted by the Lisbon Association of Landlords (APL), analyzed by the Notícias ao Minuto platform, answered by 745 landlords of leased houses, almost half of the landlords confess that they will terminate contracts if the Government decides to put a new brake on rents in 2024.

The same survey also indicates that landlords' goal will be to negotiate with tenants the "balanced rent value for both parties", with 25% even claiming they have to increase the rents of their vacant properties, in order to "compensate for the losses" they are required to sustain.  

In order to guarantee lower risk, 24.5% revealed that they will transfer their properties intended for traditional rental to other purposes such as accommodation for foreigners or students.  

In case the rent control is indeed implemented, 22% ensure they will participate in demonstrations, protests, and petitions, with almost all (93.6%) landlords disagreeing that it is "acceptable to apply a brake to rent increases that is lower than that established by the INE", as reported by Notícias ao Minuto.  

More than half of owners consider the rents they set for their properties in September of this year to be low, considering "the values that are practiced".  

President of ALP defends property owners

The president of ALP, Luís Menezes Leitão, takes the side of landlords, explaining that they are "not to blame for this crisis," as "if there is housing, it is thanks to them."

But the solution is not yet in sight. The Minister of Finance, Fernando Medina, revealed at the press conference presenting the State Budget for 2024, that the Government "continues to develop contacts" with associations of tenants and landlords, explains the news platform.

This year there is an annual rent update of 6.94% planned, and the prime minister has already emphasized that a 2% fixing is off the table, again (as in 2023). The Government continues the process of consulting with sector representatives, without yet revealing the specific and expected increase for 2024.

With no limit to rent increases, the payment can rise (and by much)  

So, in light of the latest indicator forecasted for next year, the annual rent update may be equivalent to 6.94%. What will this increase do to the rents? We will now provide an example.

According to the National Institute of Statistics (INE), the median price of rents per m2 of new lease contracts in the 2nd quarter of 2023 was 7.27 euros. In other words, for example, if you have a T1 apartment with 56m2, the median value of your rent will be equivalent to 407.12 euros.

So, paying this rental value, with an update of 6.94%, how much would the installment increase?  

In this case, the income would increase a total of 28.25 euros, paying a monthly amount of rent of 435.37 euros.

Now considering a larger property: A 4-bedroom apartment with 297m2. In this example, the median value of your rent corresponds to 2,159.19 euros. Therefore, with an increase of 6.94%, an amount of 149.85 euros would be added. This case would suffer a greater impact from the rent update, having to pay a total of 2,309.04 euros.

Weigh options to increase the monthly budget.

If this is the case, where there will be no brake on the annual rent updates, which will increase by 6.94%, and the solution suggested by the Government is not greatly valued by tenants, the monthly budget can become tight.

So, if you have already invested in all savings options and still need help, you can resort to other types of temporary solutions.

Currently, there are personal credit options capable of relieving short-term budget. In this product, in order for the effort rate to support hiring, there will be more possibilities of approval in the case of two holders.  

What should you pay attention to? This is a quick and temporary solution, because in the long run you will have to pay interest added to the financing. You should resort to it in case of need, but keep in mind that you will be paying for an extended period of time with the extra value of interest.

If you need a personal loan to relieve your finances at this time, turn to a credit intermediary like Poupança no Minuto, which will help you contract the most suitable solution for you. We are available to answer all your questions, fears, and reassure you with close follow-up throughout the process!