Landlords exploit index-linked rents as government cracks down on housing loopholes
Landlords across the country are turning to index-linked contracts to push up rents, particularly in newly upgraded flats. The trend has intensified as furnished and short-term rentals also surge in popularity. Now, the government is stepping in with new rules—but critics say the measures don’t go far enough. Index-linked rent agreements, which tie increases to the consumer price index, have become the preferred choice for many landlords. Private housing giant Heimstaden now uses them for nearly all its contracts. The shift comes as inflation-linked hikes allow landlords to bypass traditional rent controls, driving up costs for tenants.
At the same time, furnished rentals have exploded in demand. Nearly one in three apartments is now advertised as furnished, letting landlords charge extra fees. Short-term lets have also become a common way to avoid rent caps and maximise profits.
In response, the government has proposed stricter regulations. Landlords will soon have to disclose and justify furniture surcharges, originally capped at 5% but now doubled to 10% in a revised draft bill. Short-term rentals will face tighter rules as well. However, the plan to limit rent increases when inflation exceeds 3% has been criticised as ineffective. Key issues, such as penalties for rent control violations, have been delayed for review by a separate commission.
With rents rising beyond affordability, the government is also committing billions to housing subsidies in an effort to ease the pressure on tenants. The new rules aim to rein in surcharges and short-term lets, but index-linked contracts remain largely unchecked. Tenants will continue facing steep rent hikes as landlords exploit loopholes. Meanwhile, the government’s subsidy plans signal how deep the housing crisis has become.
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