Minister of Social Affairs: Renting Market in Turmoil Skip to content

Minister of Social Affairs: Renting Market in Turmoil

Minister of Social Affairs Jóhanna Sigurdardóttir has expressed deep concerns about the current situation of the renting market in Iceland, which she says keeps getting worse with the recent development of mortgages and interest rates.

“A large group of people hoping to buy their first apartment haven’t been able to get a roof over their heads because of this situation,” Sigurdardóttir told Morgunbladid. “People have to pay ISK 3 to 5 million [USD 50,000 to 84,000, EUR 34,000 to 57,000] in down payment to be able to purchase a small two-bedroom apartment.”

“The situation on the renting market is also very tight. According to a survey we conducted, 70 percent of those waiting for rented housing have ISK 150,000 [USD 2,500, EUR 1,700] in monthly salary but have to pay ISK 110,000 to 130,000 [USD 1,800 to 2,200, EUR 1,300 to 1,500] in rent,” the minister said.

About 3,000 tenants are in serious trouble and awaiting assistance from the Ministry of Social Affairs, which has established a committee for that purpose.

Sigurdardóttir said the fact that interest rates of mortgages are increasing and some banks are barring customers from assuming older mortgages on lower interest rates is only worsening the situation for those waiting, and making it more difficult for the ministry to assist them.

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