Germans in rented accommodation are feeling the cost of living squeeze

With the new energy savings measures, the Bundestag gave renters the right to heat their homes below the minimum level and save money

Every eighth tenant in Germany lived in housing overburden in 2021, according to new data from the Federal Statistical Office. One-person rent-paying households and lower-income groups seem to have been the most affected.

A household is considered overburdened if people pay at least 40% of their income for housing, loans and utility bill costs. According to a statement by the Statistical Office, in the last year of the pandemic, 10.7% of Germans were in this precarious situation.

At the same time, with the energy and cost of living crises, 2022 has likely brought an even bigger squeeze to the rental market. According to data from the Statistical Office, the price of energy for consumers has jumped by around 40% since December 2021.

Energy savings for renters

With the rise of energy prices in 2022 and average rent increases, that number has likely increased. This has prompted the Bundestag to include more liberal rules for tenants in the new energy savings measures introduced yesterday.

The new measures will be in place from 1 September until 28 February 2023 and they cover a host of areas, such as municipal heating, pool heating regulations and light regulations for shops.

In the case of tenants, they will have the right to heat their apartment below the minimum requirements in their accommodations. Essentially, in Germany, many buildings or apartments have a minimum heating requirement, set by landlords.

The minimum heating requirement is there to ensure the property does not suffer cold damage, from frozen pipes and etc. Previously tenants could not heat their rentals below that threshold, but now they will have some leeway if they want to save on heating.

However, they are still obliged to prevent damage from the lack of appropriate heating and ventilation.

Housing overburden in 2021

Around 50.5% of the total population in Germany lives in rental accommodations and while rent prices in the past six years have risen by just 8.5%, i.e. – slower than the prices of goods, the energy crisis is set to put a massive burden on households.

On average, German households spend 23.3% of their income on housing, while with renters that number is 27.6%. However, for single-person renting households, that number is 35.4%, which means that in 2021, many of them were facing housing overburden.

On the other hand, childless couples who rent seem to be among the more well-off, having considerably less housing costs, set around an average of 23.7%.

Low-income households, in particular, suffered the most from cost pressures. In the bottom fifth of the income bracket, around 36% of people lived in a household that was constantly financially overburdened.