-
All
-
Apartment
-
Flat
-
Encontramos la casa de tus sueños
News
The Shift in Rent Updates: A Turn in the Real Estate Landscape for 2024
“
13
DIC
The Shift in Rent Updates: A Turn in the Real Estate Landscape for 2024
Starting January 1, 2024, a new factor comes into play in the realm of rental agreements for homes in Spain. The extraordinary limitation on annual rent updates, in effect since late March 2022, undergoes an expansion. Over these 21 months, the Consumer Price Index (CPI) yielded its prominence to the variation of the Competitiveness Guarantee Index (IGC), with a maximum application cap of 2%. But now, with the advent of the new year, landlords and tenants face the task of negotiating the corresponding increase.
The amendment to Article 46 of Royal Decree-Law 6/2022, dated March 29, establishes the conditions for this annual negotiation. For landlords classified as major holders, the increase is subject to a new agreement between the parties, with a limit of 3%. In the absence of an agreement, the increase cap remains at 3%. For landlords not falling into the major holder category, the increment results from the agreement between the parties, and in its absence, cannot exceed 3%.
This control of annual increases has been in place since the rise in inflation due to the onset of the war in Ukraine. However, some measures, such as the limitation on the annual contract update, remained in effect until December 31, 2023. During this time, experts and stakeholders in the real estate market express various opinions about its impact.
According to Antonio Carroza, president of Alquiler Seguro, these interventionist measures have harmed both landlords and tenants. The supply of permanent rental homes has decreased, and the housing law passed in May has not solved market problems but contributed to the reduction of the rental market.
José Ramón Zurdo, general director of the Rental Negotiation Agency, rejects interventionism, arguing that the upcoming increase to 3% does not reflect the market's reality. The supply of permanent rental homes has decreased by 12%, and the housing law has driven the growth of seasonal rentals.
Ángel Martínez León, vice president of the General Council of Official Colleges of Real Estate Agents (CGCOAPI) of Spain, emphasizes that the limit on price increases is not the sole cause of the reduction in rental supply. He mentions that small landlords prefer to keep good tenants in the current situation, and fear of non-payment and occupation of rented homes are additional concerns.
In a market where supply is scarce and demand drives up prices, landlords focus on profiles that offer more legal security against non-payment. Despite this landscape, solutions are offered, such as non-payment insurance and database consultations to provide greater peace of mind to landlords.
In summary, the change in rent updates for 2024 poses challenges and debates in the Spanish real estate landscape. While landlords and tenants adapt to these new conditions, the long-term impact remains a subject of speculation and analysis in an ever-evolving market.
Subscribe
Subscribe to our mailing list and you will be first to receive new properties
Designed by CRM Inmovilla