A plan recently passed by the Berlin senate to freeze rent prices across the city for the next five years has been deemed unconstitutional by the German Government.

In a letter sent to Kai Wegner (CDU), a member of the Bundestag representing Berlin, the German Ministry of the Interior, Building and Community has said the rent cap is a matter for federal rather than state regulation.

According to the letter, rent limits are already “comprehensively and conclusively regulated” by the Federal Government, preventing Berlin or any other state parliament from introducing similar protections.

The Ministry for the Interior said rules put in place by Berlin had the effect of undermining the rules handed down by the Federal Government. When it came to federally regulated matters, the “legislative competence of the German states” was “blocked”, the statement said.

The ministry also expressed concern about the impact of the law on investment and new construction. Since the law was first proposed, building permits have fallen significantly – with a 40 percent decrease in September 2019 compared to the same month last year.

After being debated for months, the rental laws were passed by the Berlin senate in October. The law is expected to be finalised by the House of Representatives in early 2020, before being applied retroactively to June 2019.