Know your neighbour; why most people in Berlin rent

When London­-born Charlotte Everitt moved to Berlin ten years ago it was unusual.

“I used to tell everyone at home what a great place it was.” But after a while, as more and more Brits moved to Berlin, she stopped. “Ten years ago I was quite unusual living here. Now English is the most spoken language in my neighbourhood. Probably followed by Spanish and French.” Everitt, 31 and a translator, lives in Mitte, a fashionable area in the centre of Berlin.

She is one of thousands of millennials who move to Berlin each year and make it their home. In fact Berlin’s population is increasing by more than 40,000 people a year ­- a figure which is putting pressure on the housing market and ensuring that rental apartments are becoming a hard-­won commodity.

Good news for landlords

The Berlin rent market is extremely healthy, partly because nearly everyone does it. White collar, blue collar, young and old, families and singletons. The owner occupier market is just 18% which leaves a large pool of people looking to rent from a limited supply of housing stock ­- good news for landlords. Everitt rents with her boyfriend, but before that she lived on her own. “It’s common to live in Berlin on your own. Unlike in London high rents don’t force you to live with a group of friends or your partner.”

There are other cultural differences. “In the UK people rent until they buy. It has a feeling of transience about it, but in Berlin it doesn’t matter that they don’t own the property, they still treat it like home. There is no status involved.”

Berlin rent culture

Most apartments are rented unfurnished, so without light-­fittings and carpet. It’s even common for a flat to come without a kitchen, and the tenant must put one in. But once a tenant moves into the apartment’s shell they paint it, decorate it, furnish it and it becomes home. These practises discourage tenants from frequently moving and give them and their landlord stability.

Home sweet (rented) home

Strong legislation means that tenants are protected and feel confident living in rented accommodation. It’s common for people to have rented the same flat for over 50 years. Leases can be handed down so families may live in the same flat for generations.

However, Berlin rent is a bit of an anomaly and the market is not the same Germany over. In Munich or other German cities the owner occupier rate is more like 45%. The reason for this is historical.

Traditionally Berlin has been a working class, socialist city where property ownership wasn’t something to aspire to. Then the iron curtain was drawn and the city was divided ­- this instability meant most people in Berlin didn’t want to invest their savings into bricks and mortar. In 1948 the Soviet Army blockaded entry points to West Berlin and suddenly all industry moved out. This made Berlin an unpopular and difficult place to be. West Germany was booming but Berlin was stagnating. The government gave out handouts to incentivise people to stay in the area, including rent subsidies that continued until the wall came down. Even then property prices stayed depressed as large companies didn’t rush back to Berlin and unemployment rates remained high.

It’s only recently with an influx of tech and media companies that Berlin’s economy is beginning to recover, and rental income is going up along with property prices. New employment opportunities plus low rents -­ in Berlin the average rent is just 20% of the average millennials salary, compared to 70% in London – means those millennials will keep on coming. Charlotte Everitt is keeping schtum.

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