Berlin has become the first city in Germany to introduce a rent cap in a bid to regulate what landlords can charge their tenants. 

Landlords will be unable to increase rent prices by more than 10 percent above the local average.

"We don't want a situation like London or Paris," managing director of the Berlin Tenants' Association Reiner Wild explained to The Guardian. "The reality in Paris or London is that people with low income have to live in the further-out districts of the city." 

Rent cap controls were already in place for existing contracts but will now be applied as a blanket rule to new contracts. Original rules made exemptions to newly built and wholesale renovated properties in a bid to encourage investment in building projects. But those who were already being charged under the legislation were paying significantly less than those who had signed new rental contracts. 

"The rent ceiling is very important for Berlin because the difference between the rent paid in existing contracts and new contracts is so high," Wild explained. "The other problem is that we have 40,000 more inhabitants per year. Because of this situation the housing market is very strong."