Rental Giant Hiked Rates 50% To 70% Over Past Two Years

Gamma, one of the largest rental companies in Reykjavík, has driven up rents by 50% to 70% over the past two years alone. Meanwhile a new poll from the Housing Financial Fund shows that rents have risen far higher than wages can keep up with them.

In a lengthy Facebook post from Ragnar Þór Ingólfsson, the chairperson of the VR labour union, he reveals that a number of renters have received letters from Almenna leigufélagið, a company owned by Gamma, where they are asked if they want to renew their 12-month contracts for another 12 months with increases in the tens of thousands of krónur.

“We’re talking about 50% to 70% rental increases over about two years,” Ragnar writes. “In many cases this involves individuals and families earning low wages, who have so little income left over after feeding themselves, and are in shock and at a loss as to how to respond. The choice is to either take this deal, or end up on the street.”

Rent is not the only increase these tenants are hit with, either. In many cases, Ragnar says, they are also seeing their insurance rates raised, or will be charged “moving fees” and even charges for painting the apartments that can go as high as 90,000 ISK.

This essentially puts renters in the position where their wages after paying rent are shrinking, but they have little choice but to accept the extraordinary terms of these rental agreements.

Adding insult to injury is the fact that wages in Iceland are not able to keep up with these rent increases. Stundin reports that, according to a new poll from the Housing Financial Fund (HFF), rents have increased about 82% over the past seven years; meanwhile, wages have increased by 66%.

As a result, nearly everyone who responded to the poll – or 92% – believe it is not economical to rent in Iceland, and only 57% of renters feel as though they have secure housing. At the same time, 80% say there are far too few choices on the rental market. This essentially puts renters in the position where their wages after paying rent are shrinking, but they have little choice but to accept the extraordinary terms of these rental agreements.

“The number of homeless people [in Iceland] has nearly doubled over the past five years,” the report on the poll states in part. “Documentation from Eurostat shows that rent as a percentage of income for low wage earners is significantly higher in Iceland than it is in other Nordic countries.”