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ARCHIVED - Rental prices set to skyrocket in Spain
The average apartment in Spain could cost 450 euros more each year
In the lead-up to Christmas consumers in Spain are already worried about the soaring costs of electricity, fuel and even groceries, but it appears that rental prices could soon be added to this list of woes. The Consumer Price Index (CPI) shot up to 5.4% in October, the highest rate since September 1992, and experts believe this will lead to an increase in rent for clients whose payments are linked to the CPI.
A recent study by Idealista put the average price of a two-bedroom apartment in Spain at 700 euros per month, but with the 5.4% hike, this home would cost 38 euros more each month – that’s more than 450 euros over the course of a year.
Who will the price hike affect?
Article 18 of the Law of Urban Leases (LAU), which regulates the annual update of rent in Spain, states that rental prices can only be updated once a year, on the date the original contract was signed. Therefore, the increase will only affect those whose rent is already due for review.
It is also important to note that the law stipulates that a rent increase can only be applied if it is expressly stated in the contract between landlord and tenant for all agreements signed after April 1, 2015. For all earlier contracts, the owner is allowed to update the price annually based on the CPI whether or not it is written in the rental agreement.
Article 18 also indicates that the new rental price can be applied as of the month following written notification by the landlord, which must detail the percentage increase applied.
Enric Aragonès, spokesman for the Sindicat de Llogateres (Tenant Union) has spoken out against the rule, which only pushes rental prices upwards and doesn’t result in a decrease when the CPI falls. He has argued that the historically high rate “will drown tenant families even more” since almost half of people in Spain spend more than 40% of their income on housing.
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