Low Rents For Failed Mortgage Debtors In Hungary
- 22 Mar 2012 8:00 AM
"The cabinet yesterday decided that very low rents will be charged to troubled mortgage borrowers who sell their homes to the National Asset Manger (NET). The NET was created last year to buy an estimated 25,000 homes by 2014 at 35-55% of market value from financially strapped mortgage debtors, who will become tenants.
The government has decided to cap the annual rent at 1.5% of the value of the home, which amounts to a monthly Ft 10,000 on an Ft 8 million home, well below the market rate, analysts told Napi Gazdaság.
This fee, subject to changes in inflation, is totally unrealistic on the market, where tenants pay 5-6% of the value of the home, said Balázs Nagy, owner of real estate consultant Palace Ingatlan.
The fee is hardly enough to finance maintenance or conservation of the properties, observers add.
The tenants can later buy back their homes from the NET."
Source: Hungary Around the Clock
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