How much will house rents rise in 2022?

The value of rents should rise again by 0.43% in 2022, after having remained unchanged this year, according to the inflation figures for the last 12 months until August, released this Tuesday, August 31, 2021, by the National Institute of Statistics (INE).

According to INE data, in the last 12 months until August, the average change in the price index, excluding housing, was 0.43%, a value that serves as the basis for the coefficient used for the annual update of rents for the next year, under the New Urban Lease Regime (NRAU), which represents an additional 43 cents per 100 euros of rent.

The 0.43% increase in rents in 2022, applicable to both urban and rural areas, follows the ´freeze this year´ (following the negative variation in the price index) and the increases of 0.51% in 2020 , 1.15% in 2019, 1.12% in 2018, 0.54% in 2017 and 0.16% in 2016.

Notice must be published in DRE by October 30 of each year

By law, rental amounts are generally subject to annual updates that apply automatically due to inflation. The NRAU stipulates that INE is responsible for calculating the income update coefficient, which must be included in a notice to be published in the Diário da República by October 30 of each year in order to become effective.

Only after the publication in the Diário da República will the owners be able to announce the rent increase to the tenants, and the increase can only actually occur 30 days after this notice.

According to the lease law, the first update may be required one year after the term of the contract, and the following one year after the previous update, with the landlord having to communicate in writing, at least 30 days in advance, the coefficient of upgrade and the new income that results from this calculation. If not, landlords are not obligated to apply this update.

Rents prior to 1990, however, were updated as of November 2012, according to the NRAU, which allows to increase older rents through a negotiation process between landlord and tenant. If they have been subject to this extraordinary update mechanism, they are exempt from re-upgrading.

Source: Idealista