Housing: Reference interest rate for tenancies rises for the first time
The mortgage reference interest rate, which applies to rents, is now 1.5 percent. This allows landlords to increase rents for residential property.
On June 1, the Federal Housing Office (BWO) published the new mortgage reference interest rate, which will apply from June 2. It is now 1.5 percent and is therefore 0.25 percentage points higher than the last published rate. According to the BWO, landlords are entitled to a rent increase of 3% as a result of the rise in the interest rate.
The Federal Office also points out that other factors can play a role in a rent increase, such as the change in the national consumer price index (inflation), which may be partially taken into account. In addition, a change in maintenance and operating costs can lead to an adjustment of the rent.
Credit Suisse expects further increase
The rise in the reference interest rate was expected due to the Swiss National Bank's interest rate turnaround. According to Credit Suisse, further increases in the reference interest rate will follow. The bank expects a second step to 1.75% as early as December, with a third rise a year later. According to Credit Suisse, net rents calculated at a reference interest rate of 1.25% will increase by 6% by April 2024 as a result of the rise. However, as landlords are allowed to claim an additional 40% of accrued inflation and usually 0.5% in general cost increases each year, the increase could be as high as 10%.
However, Credit Suisse assumes that around half of all rental agreements are based on a higher reference interest rate than the current rate of 1.25%. Accordingly, the rent increase is likely to be lower and amount to up to 7%. (ah)
