Rents to remain tied to bank rates

Parliament has thrown out a proposal by the government to uncouple rents from bank mortgage rates.

This content was published on September 14, 2010 - 14:32 and agencies

The House of Representatives narrowly rejected the plan which aimed to link the price of rented accommodation directly to inflation.

The decision, which came despite pleas by Economics Minister Doris Leuthard, overrules the Senate, which had backed a reform.

During Tuesday’s debate opponents, from the rightwing People’s Party and the centre-left Social Democrats, argued the time was not right and that the proposal was unlikely to lead to more stable rents.

However, supporters warned that a rise in mortgage rates could lead to rent hikes of up to 40 per cent.

The home owners‘ association welcomed the decision, while the tenants’ association said parliament had missed an opportunity.

About two-thirds of the population in Switzerland live in rented accommodation.

Urs Geiser, and agencies

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