Landlords and Tenants Brace for Changes as 25% Rent Increase Cap Expires in July
With the expiration of the 25% rent increase cap on July 1, 2024, landlords and tenants are left wondering how future rent hikes will be calculated. This cap, introduced two years ago to prevent exorbitant rent increases, will no longer apply unless new regulations are enacted.
For the past two years, a 25% limit on rent increases was enforced during lease renewals. According to NTV, with the end of this cap, consumer inflation (CPI) will once again dictate rent increases. The rate of increase will be based on the twelve-month average inflation rate.
What Will the Rent Increase Be?
Landlords and tenants will use the twelve-month average inflation rate to determine rent increases during renewal periods. The exact rate for July will be finalized with the release of June’s inflation data, expected at 10:00 AM on July 3, 2024.
For June, the twelve-month average inflation was 62.51%, meaning business owners renewing leases could raise rents by that percentage. However, due to the ongoing 25% cap, this rate was not applied to residential leases.
Experts believe that the removal of the cap will normalize the rental market. They anticipate that rental contracts will return to normal patterns and suggest that, with stable prices and decreasing inflation, real rent prices could potentially decrease over time.
Source: Dunya.com / Prepared by Irem Yildiz