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Although inflation continues to reduce its course, the economic situation of the French remains no less worrying. The tenants, in particular, helplessly watch to rising rents. And we’re not talking about a small increase.
In fact, between 2009 and 2019, this increase is 16%. Housing in France is now a challenge for thousands of people. Unfortunately, we don’t have good news to announce to tenants.. If owners complain about the increase in property taxes, those who occupy the accommodation regret this constant increase in prices.
Rents are constantly increasing for tenants
Between 2003 and 2023, rents increased by an average of 1.4% per year. Although this rate is lower than general inflation of 1.7% over the same period, It still represents a significant increase for tenants. Unfortunately, the trend does not seem to be reversing.
March 31 marked the end of a crucial protection for tenants in France. To counter the effects of record inflation, the government had put in place a shield limiting the increase in rents to 3.5%. This measure aimed to protect the purchasing power of the French. However, since March 31, 2024, this protection is no longer in effect. Obviously, this is not good news for tenants.
To have
Bad news for tenants, rent increases expected from July
In theory, rents could therefore increase beyond 3.5%. But the owners don’t do what they want. To increase rents, they must follow a strict calculation method.
A method for adjusting the amount of rent
In France, landlords can increase rents each year depending on the evolution of the Rent Reference Index (IRL). The rent is readjusted annually according to the IRL of the quarter specified in the lease. For example, if the first quarter IRL increases by 2% compared to the previous year, the rent may also increase by 2%.
The removal of the 3.5% cap means that rent increases will no longer be limited when the IRL is next published in July. This is causing concern among many tenants, who fear significant rent increases.
They can nevertheless be linked to some relative good news. Indeed, since inflation is slowing down to approach 2%, the increase in IRL will be more moderate than in 2023. This is also why the government has decided to end the shield for tenants.
A relative increase for tenants?
According to INSEE, price increases are currently around 2.5%. Therefore, rent increases should be lower than the old ceiling of 3.5%. The first uncapped IRL, reflecting the evolution of the second quarter of 2024, will be published in mid-July.
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Tenants: bad news, rents risk soaring in the coming months in France
Despite the end of legal protection, tenants could benefit from a more favourable economic situation. Future revaluations should be between 2 and 3% for the coming monthswhich could mitigate the financial impact of the end of the anti-rent increase shield.
Of course, we are pleased with this relative increase, which is lower than the shield. On the other hand, it is still an increase. Paying 2.5% more every month for rent is a challenge for tenants. One more challenge.
