Finland's largest residential rental firm, the Helsinki City Housing Company (Heka) is planning significant rent increases for tenants amounting to a total hike of more than 10 percent during this and next year.
The changes will see Heka's residential property rental fees increase by four percent this year. By comparison, rises in previous years have averaged around 1.5 percent.
In a statement issued on Monday, Heka blamed the move on sharp interest rate increases. The company is also carrying a large amount of debt, and the requirement to cover rising interest rates as well as other general costs will be now reflected in rent prices.
The firm has financed the construction of new properties entirely with borrowed money, and renovation work has also been largely carried out by taking on more debt.
"Interest and other costs have increased this year more than expected and budgeted. Renovations and other repairs make up a significant part of Heka's annual expenses," the company said in a press release.
The statement also noted that some upcoming renovations will have to be postponed.
The company's rent prices have traditionally been lower than the average market level in Helsinki. This year, the average Heka rent is 12.60 euros per square metre, increasing to 14 euros if the hikes are implemented.
Heka's 2024 budget is scheduled to be ready by September, and tenants can expect to receive more information on next year's rental costs during the month of October.
Heka owns around 50,000 rental apartments in the Helsinki metropolitan area.
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