The Minister for the Environment has launched a housing scheme which he hopes will be sufficient to encourage the widespread renovation of rundown buildings for the lettings market.
This 'Rehabilitate for Rent' scheme has a low-interest credit line to help landlords improve the conditions of their properties and in return the properties are to be let at '20-30% below the market rate.'
Private landlords can apply to a €50 million fund with interest fixed at 2.9% with a 15 year repayment limit.
The government's objective is to make improvements to 300 buildings and upgrade 2,000 dwellings for letting at below market rate.
In presenting the shiny new programme, the Minister for the Environment Jorge Moreira da Silva spoke of a ‘paradigm shift’ (honestly) that gives more importance to the rehabilitation and renting of properties as new ones cost more.
The money will come from the European Investment Bank and the Development Bank of the Council of Europe and is only for buildings that were built 30 or more years ago.
The fixed interest rate of 2.9% is for up to 90% of the total investment cost including studies, design and preparatory work.
"The sustainability of cities is not just to do with the efficient use of natural resources and care of adjacent green spaces, but also for recovery of degraded areas such as some historic districts and old industrial zones. Urban regeneration is an instrument of renewal for cities and villages, promoting appropriate measures of economic revival and strengthening cohesion and territorial potential. Bringing back residents to city centers is a clear objective of sustainable urban development based on policies that improve safety, the mobility of citizens and air quality," reads the ministerial waffle.
The last ministerial idea in the lettings market, the reorganisation of the Alojamento Local lettings system launched by Secretary of State for Tourism, Adolfo Mesquita Nunes, was good in theory but failed in practice. This was more to do with naivety and inexperience than a lack of care.
The minister’s plan to regenerate Portugal's urban centres with an insistence that subsequent rents are a vague '20-30% below market rate' shows a lack of grasp and lack of experience in dealing with landlords who even now will have worked out how to borrow money at 2.9% and avoid any loan conditions that they do not like.
