With Charlie Cailloux, Legal Advisor for Particular to particular and the PAP.fr site, the meeting of the day is devoted to the increase in rents over one year: 2.48%, a record since 2009.
franceinfo: Can you remind us of the rules for indexing rents?
Charlie Pebbles: Yes, each year, on the anniversary date of the rental contract, the owner can request that the rent be indexed to the reference rent index (also called the IRL). This IRL is calculated by INSEE each quarter based on the consumer price inflation rate and applying certain corrections.
For the index of this quarter which has just been published, this means that all rental contracts which were signed between mid-April and mid-July can be increased by 2.48% (so for a rent of 800 euros , that’s 20 euros more per month or 240 euros more per year). Beyond this figure of 2.48%, it is above all the trend that is interesting: to find such an increase, you have to go back to the very beginning of 2009, at the time of the financial crisis.
And we can fear that the increase in rents will accelerate in the months to come…
Yes, we can fear it, the inflation rate reached 4.5% in France in March, and the forecasts are not optimistic so the IRL will follow this trend! The next publication of the IRL is mid-July and we can already predict that the IRL will be higher. This is information that tenants must take into account in their budget. For several years, the increase has been very, very limited, almost nil in 2020 and 2021. If inflation continues to rise, it will not only affect consumer prices, but also rents.
Is the indexation of rents automatic? On each anniversary date, the rent increases!
No, it’s not automatic! The owner must make the request in writing. As long as he does not appear, the tenant continues to pay the usual rent. And to be honest, the owner is not obliged to appear, he can very well give up the revision. Many landlords do not apply indexation because they consider that rents are already very high or because they prefer to retain their tenant, especially in areas where demand is low.
The higher the rent is set, the more likely you are to see your tenant leave (and therefore lose a month’s rent to find one). There is also a risk that he will not maintain the accommodation, or even that he will no longer be able to meet the rent. Well, that said, inflation also hits homeowners: the cadastral rental values that serve as the basis for calculating the property tax will increase by 3.4% in 2022.