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Rent Up by 40 Percent

The cost of rent went up by 40.2 percent from the beginning of 2011 until July 31 this year, according to a new report from the Ministry of Welfare.

During the same period, residential property prices increased by 41.8 percent. The cost of housing, measured as proportion of disposable income, increased among renters following the 2008 financial crisis, but went down among home owners.

The number of renters has steadily increased since 2007. That year, 17 percent of Icelandic households rented, but 27 percent in 2013. The increase was mainly among people aged 25-34, low-income people, and single parents. Following the financial crisis, market conditions worsened and access to loans became limited, resulting in more people renting as opposed to buying property.

Between 2007 and 2013, the number of Icelandic homes in the rental market increased by 13,000. Simultaneously, the number of households went up by 6,000. Thus, the increase in the number of households in the rental market exceeded new households by 7,000.

Those figures appeared in a memo presented at a government meeting yesterday by Eygló Harðardóttir, minister of social affairs and housing, reports.

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