• Thu. Jun 20th, 2024

The Rising Cost of Living and Housing Arrears: How to Survive in the New Economic Reality

BySamantha Jones

Jun 12, 2024
Property managers report a clear increase in arrears

Rising interest rates and increasing cost of living have led to a significant increase in arrears for housing associations over the past year, with more than 60 percent of property managers reporting an increase in company dues. Residents are struggling to keep up with their financial obligations, causing neglect of payments to be the primary reason why apartments are taken over by housing associations.

Although housing associations have raised maintenance fees by nearly ten percent on average this year, many residents are still struggling to cover their expenses. Concerns about rising fees are prevalent among residents, with many worried about the impact on their finances. Tight budgeting has limited the availability of funds for small repairs and maintenance tasks, leading to challenges in responding to unexpected events.

The sudden increase in interest rates has added to the financial burden for housing company shareholders, making it challenging for them to keep up with payments. Despite this, some areas, especially those experiencing population decline, are facing a more significant increase in arrears. While bankruptcies in building societies are rare in Finland, the increase in arrears is causing concern.

The Real Estate Association recommends that housing associations maintain a buffer of 2-3 months’ worth of maintenance fees to cover unexpected expenses. Although the situation is not considered alarming, it is essential for housing associations to monitor arrears and ensure residents can meet their financial obligations. As salaries rise and interest rates stabilize, there is hope for a gradual adjustment to the higher cost level.

In conclusion, the rise in interest rates and cost of living has pushed residents beyond their financial limits, leading to an increase in arrears for housing associations. Neglecting payments remains the primary reason why apartments are taken over by these associations. While concerns about rising fees are prevalent among residents, tight budgeting has limited their ability to respond to unexpected events effectively. The Real Estate Association recommends that housing associations maintain a buffer of 2-3 months’ worth of maintenance fees as a way forward towards addressing this issue gradually as salaries rise and interest rates stabilize.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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