Denmark Caps Housing Rent Increase Due to Skyrocketing Inflation

The Danish parliament is to prevent landlords from taking advantage of high inflation to drastically hike rents by capping increases at 4 percent.

Landlords in Denmark will not be able to raise rent up excessively due to skyrocketing inflation after a majority of parties in parliament on agreed on a change to the Tenancy Act (Lejeloven). While the Tenancy Act usually allows for rent increases in pace with inflation, the agreement, caps increases at 4 percent in the next two years.

“For the government it was crucial to protect Danish tenants. They can’t be forced out of house and home because of the drastic inflation we are seeing at the moment,” the minister for housing and the interior, Christian Rabjerg Madsen. “I’m therefore pleased we were able to reach this agreement to limit rents at four percent. That will give tenants security and peace of mind,” he said.

The government and allied left wing parties the Social Liberals (Radikale Venstre), Socialist People’s Party (Socialistisk Folkeparti, SF) and Red Green Alliance (Enhedslisten) are signatories to the agreement.

Concern was raised over rent increases after inflation in July reached 8.8 percent, the highest in Denmark since 1983. Existing tenancy laws would allow landlords to charge tenants with rent increases corresponding to that percentage. The cap applies to both existing and forthcoming rental contracts.

It will also be applied to rents that were raised in recent months. Those rents typically will be reduced three months after the law takes effect. That corresponds to the typical notice period on tenancy agreements.

As many as 160,000 rental houses have been subjected to very high rent increases, according to the Ministry of the Interior and Housing.