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Four students in a corridor kitchen. Two sit at a table talking, one is cooking by the stove and one is sitting in a sofa reading.

Well-considered rent increases secure future housing

AF Bostäder’s rent-setting stems from a rent model based on the students’ wishes, and the annual rent increase is negotiated with the Swedish Union of Tenants (Hyresgästföreningen). As AF Bostäder is a foundation, the revenue remains entirely within the organisation, where it is used for maintenance and long-term investments.

AF Bostäder offers a broad and varied range of student housing, from corridor rooms in older properties to apartments with a modern design for 1-3 people in new buildings. The common thread is that the housing is to be good value for money, offer high quality and be adapted for students.

“The rents can vary within the property portfolio, depending on the property’s age, size, location and equipment,” says Claes Hjortronsteen, Rental Manager at AF Bostäder. “The cost of specific housing depends quite simply on two things: firstly, the rent-setting itself, which is based on our rent model, and then the annual rent increase, which is related to inflation and increased costs.”

In Sweden, a number of different rent models are applied, as needs and appraisals differ between cities, areas, types of housing and customers. Students and families with small children value completely different things, for example.

“Our rent model is designed specifically for student housing in Lund and based on how our customers appraise the characteristics of their housing,” says Claes Hjortronsteen. “Thanks to our various surveys, we have a good picture of what our students want. High on the wishlist is fresh and clean accommodation, preferably with a good kitchen and, not least, a rent that also includes heating, electricity, water and broadband. It can be difficult to compare our rents, as different companies use different rent models. The all-inclusive perspective is a good example, and so is the fact that a lot of our housing has only nine-month rents. Someone who wants to compare us with a private company will probably have to consider the number of monthly rents and add in costs for electricity and broadband.”

The annual rent increase is negotiated with the Swedish Union of Tenants. Discussions in the negotiations cover future investments that are planned and how large price increases are expected to be regarding, for example, electricity, heating, water and purchased services. The previous year’s initiatives are followed up in relation to the previous negotiations.

“AF Bostäder and the Swedish Union of Tenants have long had a shared view about the students’ needs, how price-setting is to be carried out for housing and what annual revenue increase is necessary,” says Claes Hjortronsteen. “For 2021, the negotiations were affected by rising socio-economic concerns related to the pandemic, but over time it was shown that the concerns were unjustified and that a normal rent increase was reasonable.”

“The rent normally rises by approximately two per cent per year,” says Claes Hjortronsteen. “If the rent for specific housing increases by more than this, it is generally in connection with a major upgrade in equipment that raises the standard of the housing. In such cases, we do not bring in the price change until there is a change of tenant in the housing. It is a common misunderstanding that rent increases finance new construction, but that is not the case. Each new construction project is to be self-supporting, with its own budget and its own rent-setting.”

“AF Bostäder is a foundation, and the students – who account for most of our revenue – have considerable influence in the organisation. For example, the Academic Society appoints both board members and the students’ housing ombudsman. Here, there are no owners who set demands for dividends or returns, or influence us in any other way. The rents go entirely to maintenance, ongoing expenses and a surplus that ensures the organisation is stable in the long term with the scope to make investments,” concludes Claes Hjortronsteen.

Latest update June 14, 2022
Claes Hjortronsteen
Claes Hjortronsteen
Rental Manager
046 -19 15 36

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