The Icelandic market for privately owned homes and apartment flats is large, around 75-85% of the housing stock. The market for rentals is therefore limited. Rent in Reykjavik and the capital area is generally more expensive than in other areas.
If you expect to stay permanently in Iceland buying a flat or a house may be a wise move. The state run Housing Financing Fund offers loans to 70-90% of the price. You get info in English, Danish and Polish on www.ils.is The banks are also offering long term loans at low interest rates.
To find a house or an apartment you may want to:
Advertise in the newspapers: For a small fee you may place an ad stating that you are looking for a rental.
Use the internet: The following websites that are connected to the newspapers have listings that are updated daily. These ads are all in Icelandic. Look for húsnæði í boði on the following sites: www.visir.is, www.mbl.is, and www.vbl.is.
Word-of-mouth: Tell everyone you know, even people you work with that you are looking for an apartment. Often apartments for rent are not advertised in the papers as they are rented through acquaintances before people get the chance to advertise them.
Use the rental agency Leigulistinn: In exchange for a monthly fee of ISK 2,850 this agency provides their customers with a current list of all available housing for rent. Call everyday and ask if there are any new listings.
Tel: (+354) 511-1600
Put up advertisements: You may put up an ads saying that you are looking for a rental opportunity on billboards of supermarkets, local kiosks, universities, community centres, healthcare clinics and any other public notice boards.
When you have found the right apartment and both parties have reached an agreement you will be asked to sign a contract called a leigusamningur. As with all legal documents it is advisable to make sure that you know exactly what you are signing. This lease is a special form that you and the owner both must sign. It must also be witnessed. After signing, this contract is registered or notarised (þinglýst) at the District Commissioner’s office (Sýslumaðurinn). This is necessary to prove that the contract is legal and binding and must be shown when applying for Rent Subsidy or Húsaleigubætur.
According to the law, in the case of a legally registered rental agreement, the owner may not force the renter to pay more than one month’s rent in advance if insurance is given in the form of cash, promissory note or bond. By law if the renter pays three months in advance then the renter has the right to be in the apartment three times longer than the agreement says or for nine more months. It is possible to find leases or contracts of tenement at most banks, post offices, on the net or in any Social Services (félagsþjónustan) office. To have your lease registered, go to the District Commissioner. The cost is ISK 1,300 and it takes about 2 business days to complete the process.