The HFF’s main function is to provide mortgage loans and protect the assets entrusted to the Fund. In light of the current shortage of rental housing, the HFF has decided to address the situation by altering its procedures while emphasising the framework set for the Fund.
New procedures increase the supply of rental housing
The HFF has introduced new procedures for managing the Fund’s properties in communities outside the greater Reykjavik area, where turnover in the property market is limited. In these communities, properties that are listed for sale and are in good condition will simultaneously be offered up for rent. Demand for leased or purchased properties dictates the course taken for these HFF properties. This increases the probability that the ratio between properties for rent and properties for sale will accurately reflect conditions in the different communities where HFF properties are located.
Most HFF properties are already leased out; 75% of appropriated properties go immediately on the rental market
The HFF itself leases out 920 properties and 450 others via Klettur Property Management, adding up to a total of 1,370 rental properties across Iceland.
Residents of an appropriated property have the option of continuing their residence as tenants. Thus, three of every four apartments appropriated by the HFF are immediately leased out to the residents at the time.
There are currently 983 properties listed for sale with real estate brokers. With double listings, however, potential rental apartments will increase considerably. It is to be noted that many of the HFF’s vacant properties are in areas where there is little demand for rental housing or the properties are too big to be suitable for the rental market.
Habitable housing does not equal rentable housing
Approximately 140 properties are not undergoing a sales process, as they are either uninhabitable or in the process of entering the purchase or rental market. There are stricter requirements for the condition of apartments on the rental market. Many properties appropriated by the HFF require considerable renovations before meeting the requirements made to housing on the rental market. In the last two years, the HFF has attempted to meet the great demand for rental housing by undertaking extensive renovations of 530 properties across the country, particularly in the Suðurnes area.
Extensive housing renovations are not consistent with the role of the HFF
The idea of the HFF undertaking extensive renovations in order to introduce a property on the rental market is inconsistent with the Fund’s role and authorisations. In addition, the HFF has no sources of income to pay the high costs of undertaking such extensive renovations. Such undertakings require additional funding for the HFF.
The HFF has only a temporary authorisation for leasing operations
The HFF’s main function is to provide mortgage loans. After the banking crisis of 2008, the Fund received temporary authorisation to rent apartments in light of social circumstances. Said authorisation does not alter the fact that the HFF’s main role is to provide mortgage loans and protect the assets entrusted to the Fund.
