I also met with Ingrid Eiken, newly-appointed chief executive of the Swedish Association of Real Estate Agents, to discover how the country’s residential industry operates. It is quite different to the UK’s and reflects Scandinavia’s well-known love of regulation. Here are some headlines:
Ingrid’s organisation, Maklarsamfundet, is one of two ‘umbrella bodies’ for agents in Sweden. It has about 5,000 members and its rival organisation has some 700;
Membership of either is voluntary, but there is an incentive: only by being a member can estate agents secure professional indemnity insurance, which as we will see is important;
Estate agents are paid by sellers (based on a commission of roughly three per cent, although this dips down outside Stockholm and is open to negotiation), but agents are regarded legally as professional intermediaries and act for both seller and buyer;
Clients are seen as consumers, and the agents’ service is regarded as ‘neutral’ and to facilitate a sale, not simply to get the highest price for the seller;
There are random checks by regulators on the valuations of properties for sale and agents can be fined for under- or over-valuing properties, as well as facing challenges from disgruntled sellers or buyers (which is where the insurance comes in handy...);
The lettings sector is strictly controlled and a rent for any one property must be roughly in line with the average for an area. So rent level of poorer-condition properties may be ‘averaged up’ and a top-end property may be ‘averaged down’;
Many private flats have been converted to condo status in recent years, introducing powerful boards to decide over tenants and communal charges and maintenance;
The Swedish government is expected to loosen current controls over private apartment owners being able to let out their apartments if they move elsewhere. Currently this is prohibited, preventing any kind of ‘buy to let’ culture.
Details on Stockholm, its current housing market and prices will be in the FT article, probably in May.
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