A new brake on rent payments? 46% of property owners are considering terminating contracts.

The possibility of restoring restrictions on rent increases in 2024, as happened in 2023, is disliked by many landlords. The majority (46%) are considering terminating their leases as soon as they can. This is one of the findings of a survey conducted by the Association of Lisbon Property Owners (ALP).

According to the survey - 745 property owners questioned between September 30 and October 8 - a third (33%) of landlords plan to renegotiate fair rents for both parties with tenants, while a quarter of owners (25%) say they intend to raise rents on vacant properties to compensate for losses incurred due to the inability to raise rents. "The other 24.5% are considering moving their properties from traditional rentals to other lower-risk segments, such as renting to foreigners or students. Participating in rallies, protests and signing petitions are among the plans of about 22% of property owners, indicating resentment in the market," the ALP said in a statement.

According to the association, almost all landlords (93.6%) do not consider it acceptable to impose limits on rent increases in line with inflation as determined by the National Statistical Institute (INE).

Over 63% of respondents feel that the rents they receive for their properties are below market prices. One out of five landlords notes that they were paying tenants' arrears at the end of September.

As for the relationship between landlords and tenants, 47% of survey participants state that they have friendly relations with tenants, although not very close.

ALP president Luiz Menezes Leitão said that "landlords are not the culprits" of Portugal's housing crisis. "If there is housing, it is thanks to them. If there are rentals, it is thanks to those who have saved and invested in this market, despite the fact that the main risk falls on the state. The ALP has been publicly warning for eight years that the policies adopted by successive governments have been irresponsible and have led us to where we are now. Breaking or systematically changing laws will not lead to more affordable housing and lower prices.... The government's job is to support renters who are proof of need without destabilizing a market that is already a ticking time bomb," he added.

Government 'considering' new restrictions on rent rises for 2024

Figures from the National Statistics Institute (INE) show that inflation for the last 12 months to August excluding housing is 6.94% and this is assumed to be the rent increase for 2024. If rates increase in line with this annual rent update factor, as set out in the New Rental Regime for Urban Properties (NRAU), they would be as follows:

• rent of €300 will increase to €320.82 in 2023;
• the rent of 400 euros will become 427.8 euros;
• rent of €500 will increase to €534.70 in 2024;
• rent of 750 euros will become 802.05 euros;
• rent of 900 euros will become 962.5 euros;
• rent of €1,000 will increase to €1,069.40 in 2024.

However, Prime Minister Antonio Costa has already said that the government is “considering” imposing new limits on rent increases for next year, just as it did this year when rent increases were capped at 2% (instead of 5.43%), following a sharp rise in inflation.