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Proposals to regularise spiralling rental market

17 NGOs says rental prices hitting vulnerable groups the hardest

Unregulated rental market was hitting the most vulnerable, NGOs say.

Unregulated rental market was hitting the most vulnerable, NGOs say.

A rental registry, tax incentives for long lets, and price hike brackets tied to cost of living adjustments are among the rent regulation proposals put forward by a coalition of 17 NGOs.

“Malta has almost no regulation in the rental market, and the law of the jungle currently applies. This is forcing many tenants to lead precarious lives, with only temporary roofs over their head and no place to call home,” the coalition said at a press conference on Saturday.

In a 12-page document, the NGOs argue that “skyrocketing” rental prices over the last few years have been hitting vulnerable groups the hardest.

“Tenants regularly paying their rent are finding themselves forced out of their homes due to overnight exorbitant increases in rent prices,” they said.

This reality was also increasingly affecting groups such as youths, some of whom had no other option but to live in rented accommodation due to unaffordable property prices.

As the cost of buying one's own home continued its steep rise, the number of Maltese living in rented accommodation was destined to increase and, in a few years, it would no longer be uncommon for Maltese people to live in rented places, they predicted.

The introduction of effective rent regulation at this juncture was therefore essential to ensure that the rental market was not driven exclusively by quick profit, without any consideration for the impact on individuals, society and the wider economy.

“We believe that landlords will benefit too from a regulatory framework since this will increase clarity and peace of mind. Rent regulation will not stop landlords from making profits out of rented property,” they said.

The rent regulation model in their document is based on laws enforced in other EU countries.

Malta, the NGOs lamented, was one of the very few EU countries without an effective rent regulation regime. The document would be presented to Parliamentarians.

The main proposals include:

  • A tax regime that incentivises long-lets through lower tax rates for longer leases.
  • The setting up of a state registry of properties on the rental market as well as the establishment of a public entity responsible for rent regulation.
  • The registration of rental properties where the first price set in the first contract would be considered an “initial price”.
  • The possibility for landlords to increase rent-prices yearly during the duration of a contract by a percentage that does not exceed the cost-of-living-increase rate.
  • Once a contract expires, the price set in a new contract should not be higher than 10 per cent of the last monthly rent paid under the previous contract.
  • Besides this 10 per cent limit, the price set in any new contract should not be more than 25 per cent higher than it was five years earlier. This is to avoid landlords having to enter into short-term contracts in the knowledge that following each contract, they would be able to increase the rent by another 10 per cent.
  • The establishment of a Rent Price Index that lists prices in different areas and for different classes of property according to their size and quality.
  • A system for the termination of contracts similar to that outlined in employment law.
  • A tax on empty rentable property that weeds out rent on the black market and increases the amount of properties for rent.

The NGOs said the country still lacked a comprehensive Housing Policy Affordable - housing depended on other factors that rent, such as the availability of social housing and the overall strategy with regards to property and construction.

They suggested rent regulation be placed within a broader National Action Plan on property and affordable housing.

The NGOs applauded Social Housing Parliamentary Secretary Roderick Galdes for working on a White Paper for regulation in the sector, to be published shortly, and said they looked forward to contributing to the consultation process.

The rent regulation proposals were put forward by Moviment Graffitti, Alleanza Kontra il-Faqar, Forum Komunita’ Bormliża, Malta Tenant Support, Malta Humanists Association, The Millennium Chapel, Żminijietna – Voice of the Left, aditus Foundation, Malta Gay Rights Movement, The Critical Institute, Spark 15, Mid-Dlam għad-Dawl, Women’s Rights Foundation, African Media Association Malta, Koperattiva Kummerċ Ġust, Integra Foundation and Third World Group Malta.

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