Rental: rents will increase in the first quarter of 2025, here’s how much

INSEE published this Wednesday, January 15, the rent reference index (IRL) for the fourth quarter of 2024, which sets the maximum revaluation that owners can apply to rents.

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This is information that should be of interest to both owners and tenants. INSEE published this Wednesday, January 15, the rent reference index (IRL) for the fourth quarter of 2024. In mainland France, it now stands at 144.64, an increase of +1.82% compared to the ‘IRL for the fourth quarter of 2023. As a reminder, the IRL, which is calculated each quarter by INSEE, is indexed to the evolution of consumer prices over the last 12 month, excluding tobacco.

If this index is also expected every quarter, it is because it defines the maximum percentage of revaluation that lessors have the possibility of applying to the annual rents of their tenants, excluding specific and exceptional situations. That is to say, owners will be able to increase rents by a maximum of +1.82% on the anniversary date of the rental lease, only if this date is located between January and December 2024.

Rents will therefore continue to increase on average in the coming months, but this increase will be less significant than those experienced by tenants during previous quarters. For comparison, in the fourth quarter of 2024, landlords had the option to increase rents +2.47%, which corresponded to the year-on-year increase in the IRL of the third quarter of 2024. But with the slowdown in inflation at the end of 2024, the maximum rent increase that owners are authorized to apply at the start of 2025 is mechanically less marked.

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An increase of 13 euros on average

So, to what extent will rents actually increase in the coming weeks? Let’s take an example. In France, the average rent amounts to 723 euros per month including charges in 2024, according to the Loc Services website. At most, landlords will therefore be able to increase their tenants’ rents by 1.82% during the first three months of 2025. A French person who initially pays 723 euros in rent and whose lease anniversary date occurs in the first quarter of 2025 will see their rent increase by a maximum of 13 euros.

Note that certain municipalities have implemented a specific rent control mechanism for several years. This is a system which limits the increase in rent when renting accommodation with a residential lease. Landlords who do not respect rent controls in the municipalities concerned risk a fine of up to 5,000 euros.

Paris was the first city in France to experiment with rent control in 2019. Since January 2023, tenants have even had the possibility of reporting to the municipality in the event of excessive rent overruns. There Paris town hall now even has the possibility of directly applying fines to owners who are not in compliance. Since 2019, several large cities such as Lyon, Villeurbanne, Bordeaux and Lille have also implemented a rent control system, also on an experimental basis.