The government’s upcoming rent reform will not help those renting out pricey villas, but those living in “untenable” situations, Prime Minister Joseph Muscat said on Wednesday.

Speaking during a pre-Budget meeting with developers, Dr Muscat said the White Paper on rent would be “controversial”.

“There will be things you won’t like, other things other sectors do not like, but we have to address this issue,” he said.

During the meeting, Dr Muscat hinted at one potential proposal that would see all rent agreements listed on an official register.

READ: Muscat underlines government efforts to make the country 'future proof'

“I can’t understand how we have a situation today where some rent contracts are not registered,” he said.

The reform will allow the market to continue operating as freely as possible while also setting some parameters that protect the most vulnerable in society, the prime minister said.

He also said the government believed in a “carrot and stick” approach for those putting their property on the rental market.

The government, he said, did not want a situation where landlords felt hemmed in by excessive regulations and preferred to take their property off the rental market altogether.

The meeting was held so that Malta Developers Association President Sandro Chetcuti could present the lobby’s proposals for the upcoming Budget.

READ: A rental sector that works - Roderick Galdes

The MDA is proposing that those involved in property speculation may act as guarantors for first-time buyers who cannot pull together the 10 per cent deposit needed to secure a home loan.

The MDA said it is also prepared to raise its minimum wage by at least 20 per cent as long as construction workers have a skills card that proves their proficiency.

Another proposal is for the MDA to set up a public-private partnership with the government in a bid to find social solutions for those struggling to rent property at around €300 to €400 monthly.

Mr Chetcuti said the MDA was also proposing that landlords be encouraged to agree on affordable rents for five year periods in exchange for favourable conditions when transferring the property in the future.

This, Mr Chetcuti said, would increase supply and ensure rent was more affordable and stable.

Mr Chetcuti also told Transport Minister Ian Borg he was doing an “excellent job” with a series of infrastructural projects.

As for complaints of traffic, Mr Chetcuti said “even when you do something in the kitchen you pull out all the pots and pans, never mind major works like these.” 

“The country is getting a major facelift and I know it is something many are excited about.”

Likewise, Mr Chetcuti told Dr Muscat he was doing good things for the country - a sentiment he has expressed during previous meetings.

On Monday the Times of Malta reported Mr Chetcuti saying that property prices were climbing because of a spike in the value of land, raw materials and labour costs and not because developers were becoming greedy.

He was reacting to a pastoral letter by Malta’s bishops who last week urged landlords and developers to adopt a social conscience and not be driven solely by greed.

“We Christians, who have a social conscience, should also have a heart and mind that exercise restraint on the rates that regulate the buying and renting of property according to just and equal criteria, underpinned by responsibility and solidarity,” the bishops wrote.

They also urged politicians to set aside partisan differences and work together to tame a housing crisis that they believe is growing into a “social emergency”.

“Families and the elderly cannot meet the rapidly escalating rent crisis and consequently are ending up on the streets,” the bishops warned. “Young people... do not qualify for a bank loan... people going through a crisis rely on the rental market.”

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