Romans rent asunder by housing boom

Michael Sheridan
Friday 14 July 1995 23:02
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While British homeowners languish in the doldrums, house-hunting Romans are engaged in a frantic boom that has more than doubled prices in the city since the mid-1980s and shows no signs of slowing.

At the same time, parliament was this week considering a new law to make renting easier in an attempt to end a saga of litigation and scarcity that has made finding a home a nightmare for many young Italian couples. Television comedies and films long ago found a staple subject in the plight of newlyweds forced to start their married life under a parental roof, where mother usually played a dominant role.

Now the housing market is altering the face of Rome as many more properties change hands and ancient areas become havens for affluent professionals, driving up prices.

Rome city council released a survey this week showing that prices for prime central property have reached an average of about pounds 3,000 per square metre. In 1981, only 46 per cent of apartments were owner-occupied. Now it is 60 per cent.

The vagaries of the rented sector entered Italian folklore after a misconceived "fair rent" law was enacted in the 1970s. Some tenants would refuse to pay rent and stayed put for years while their landlords waged fruitless struggles through the courts. Other landlords extorted rents far above the norm under illegal contracts.

The legislation now before parliament will enable tenants and landlords to agree a three-year contract with the legal right to renew for a further three years. Landlords get a tax incentive to provide lower cost accommodation under such contracts. The law has faced opposition from vested interests but seems likely to be passed.

In the 1980s, Italian banks began to develop mortgages and thousands found an escape route from renting. That has driven the market up but it also carries warning signals all too familiar to British homeowners. The council survey indicatesmortgage debt per head of the population in Rome amounts to more than pounds 5,000, almost twice as much as in the richer cities of Milan and Bologna.

And prices are already driving purchasers beyond the city limits, from where they commute by car into an already traffic-choked city centre. The costs in pollution and debt have not yet been counted because everybody is still enjoying the housing merry-go-round and 4 per cent economic growth. No doubt John Major and Kenneth Clarke would be looking on with suitably virtuous disapproval.

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