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Renting Property

Iceland - Renting Property


Renting in Iceland has been a hot topic of debate as of late. With an influx of short stay tourists, the market is saturated with high prices and low availability for long term rental properties, particularly in the Reykjavik city centre. The market is geared towards short term tourism with landlord led leasing of rooms. The city centre sees high prices with these dropping as you head further out of the central catchment area. Many expats tend to reside in short term rentals whilst searching for long term accommodation which is a sensible way to approach the long term rental market. It is reassuring to know that expats and many locals do buy and this is something which is entirely possible with realistic mortgages and plenty of available properties on sale. Doing your research about purchasing a property, what it entails and your eligibility is paramount.

It is safe to say in Reykjavik that the price of renting a room or an entire property is a bit of a minefield for international students, locals and expats who have moved there and are feeling the sting the most. During the 2014 municipal elections the necessity for more rental properties was addressed as well as the fact that Reykjavik’s rental house prices were extraordinarily high. Back in 2011 the average price for rentals had already risen by 22.8% and is increasing steeper each year as the tourism industry explodes in size. A while back in 1998, the Independence Party and Progressive Party decided to take down the pre-existing social housing to emphasise that government policy was to own rather than rent properties and the effects have been felt ever since. Nowadays, with certain areas of Reykjavik becoming trendy such as Williamsburg, the market has catered to the demand and people are being pushed further out for affordable rentals.

As of 2016 the price of renting an apartment (a room) in Reykjavik city centre is on average 161,732.27kr per calendar month (pcm) with the same outside of the city centre being 121,436.67kr. When it comes to renting more than one room, for a family for example, a 3 bed rental in the city centre would cost 263, 048.00kr and renting the same outside would be 206,842.11kr. When you head to Akureyri a small city in northern Iceland it is more common to be able to rent an apartment rather than a room and prices are aimed at short term renters with less availability but more affordable prices. The same is to be said for the less populated North East and South.

Rentals can also be found in local newspapers, so try to enlist the help of a local Icelandic speaking friend or co-worker when looking. Rental brokers and media advertisements may assist you in finding accommodation. It is also an option for you to post an advert yourself in the newspaper as someone seeking to rent for which you will pay a small fee. The following Icelandic websites are connected to newspapers with daily updates on rental properties. It will be necessary to use a translation tool to read them in English.

The Morgunblaðið Newspaper’s website which is the most popular in Iceland with over 80% of domestic views. Lists a good selection of rentals.
www.mbl.is

Reykjavik based Vísir magazine and newspaper which reports local news and has an extensive rental market listing.
www.visir.is

Due to the popularity of AirBnB and other temporary renting arrangements, landlords have been reported to sometimes get rid of monthly paying tenants and replace them with temporary tourists whilst getting good prices for pay per day earnings. Things are however looking up for anyone seeking rentals in Iceland over the next few years. As of 2013 the City of Reykjavik revealed a housing plan that 7,500 residences will be built by 2022. That means each year, 750 will be added to the market. In 2014, Reykjavik Houses (Reykjavíkurhús) launched a scheme where plots of land were developer negotiated for by developers who sought to build affordable housing for residents.

The typical length of a long term lease is one year. Before you go through with signing a rental contract do check with your work if they are willing to assist you with this as they often help out with some of the rent cost for foreigners. This means the rental agreement can be carried out through your work. When it comes to accessing, reading and signing a contract of rent agreement (leigusamningur), it’s important to have a copy available in English or your native language so that you can read through and familiarise yourself with the terms and conditions. Find out if a translation fee is charged. It must be in writing and tenants should be clear on the legally binding notice periods of both the tenant (when they choose to leave) and landlords (when they require you to leave or, if the contract can be renewed).

Check with the landlord or rental company as to what you should do when the contract is soon to run out. When you and the landlord sign it there must be a witness. Be assured that the document ensures both your rights and that after the signing, the contract itself is then notarised (þinglýst) or registered with the District Commissioner’s office (Sýslumaðurinn). Landlords may take an insurance deposit which is then repaid after the contract expires/you leave. This is dependent on looking after the property and paying on time. The landlord may ask for the insurance to be given in the form of cash, bond or promissory note and therein the tenant does not need to pay more than a month's deposit in advance.

It is written in the law that if the tenant pays 3 months’ deposit in advance then they can stay three months longer by right after the agreement. You can find contracts of tenement at most banks, post offices, on the net or in any Social Services (félagsþjónustan) office.

Short term rentals can be anything between a week to three months to six months and with the current market offering an abundance of short term accommodation, deposits may take different forms. A landlord may ask for an insurance deposit instead of, or as well as, a month's rent. Long term and short term leasing are quite different in Iceland with long term being used by locals, families and some expats. Short term is very much tourist centric. It’s worth noting if you are considering some of the more exclusive and serviced apartments, that they may ask for 6 months’ rent upfront as standard.

Renting privately means a deposit is usually necessary so do expect to pay one. For the most part, whether you are renting for a month or a year, the deposit is usually one month. It works slightly differently to what expats may be used to. The possibility of trying to leave the contract a month early and the landlord keeping the deposit isn’t an option, contracts need to be abided by. When renting in Iceland almost all spaces are furnished which means white goods, furniture and sometimes such things as kitchen utensils. Unfurnished would generally still include white goods but seeing as the market is so fast and many of those seeking rentals do not have items to go in the space, unfurnished is usually reserved for buying properties only.


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