New law on consumer credit make it harder for people to get housing loans and will force them to enter the already crowded rental market.
The new law were passed at the end of last government’s term but came to effect on 1 November.
Their purpose is to guard the interest of borrowers but they also force banks to check their customers’ ability to pay off a loan, but also their credit history based on their finance information from a database.
Henný Hinz, an economist with the Icelandic Confederation of Labour (ASÍ), reckons this means that it will be harder for people to get bank loans, including housing loans and so will have to rent.
However, rental prices are already on the rise because of much more demand than available rental properties. “This highlights the need for more diverse alternatives in housing affairs and that support from the government needs to be equally much for property renters and owners,” Henný told Vísir.is