Abstract
Rental markets hold an important role for a functioning housing market as a whole. Households with shorter time horizons, as well as households with little private equity and difficulties acquiring capital can see their housing needs met on the rental market. A functioning rental market does however require some sort of legislation. In this paper we argue that legislation must adapt to changing rental markets. We do so from the specific case of Iceland. The Icelandic rental market has, since the financial crisis, undergone noticeable structural change, evident from a number of perspectives. By applying a framework based in the role of rental market legislation, we provide a comparison between legislation in the Nordic countries. We conclude, based both in the presented structural change of the Icelandic rental market, and in aspects of Nordic rent legislation, that there is a case to be made for changes to the Icelandic legislation.
Highlights
Rental markets can cater to different types of individuals and households depending on what type of legislation a country has implemented
We argue that the gathered evidence from the available surveys allow for the conclusion that the Icelandic rental market has been undergoing structural change
5 Discussion and conclusions With this paper, we have aimed at discussing the legislation governing the Icelandic rental market
Summary
Rental markets can cater to different types of individuals and households depending on what type of legislation a country has implemented. The most evident change is the rise of the professional rental company as well as the decreasing share of municipal social housing and of the private individual arm’s length landlord The share of those renting from friends and family has more or less stayed the same, with an average of 20% in 2015–2019 compared to 17% in 2003. The increase of the market share of professional rental companies may demand according changes to legislation, clarifying tenant rights in tenure security and rent changes. Legislation with the aim of restricting Airbnb-rentals was implemented in Iceland in 2017 These past observations, regarding the increased length of tenure, decreased number of moves and increase of professional rental companies all speak to the fact that tenant security can increase without much changes to legislation.
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