Spain's rent freezes and housing law fail to prevent price rises

The Local Spain
The Local Spain - [email protected]
Spain's rent freezes and housing law fail to prevent price rises
A sign reading "For rent" hanging from a building in Madrid. Photo: GABRIEL BOUYS/AFP.

The cost of renting in 34 Spanish cities has continued to increase despite rent freezes and other measures included in the country's recently approved housing law which were specifically aimed at preventing this.

Looking to move? Find your next rental apartment here.


The cost of renting property in Spain has continued to increase significantly despite rent freezes and housing legislation designed to make life easier for renters.

Spain’s housing law (Ley de Vivienda) officially came into force back in May 2023.

The wide-ranging legislation included an array of measures intended to ease the burden of rising rental prices, including taxes on empty properties, passing on agency fees to landlords and, perhaps most controversially, the creation of rent indexes and 'stressed areas' to help limit rent rises.

This came on the back of rent freezes for some people enacted by the government in 2022, which prevented annual rent increases in line with the CPI (how it is usually done in Spain) and set a two percent ceiling on increases in 2022 and 2023 and regulated price rises on pre-existing contracts into 2024 and beyond with a newly established index.

READ ALSO: Five key points about Spain’s new housing law

However, rents in Spain continued to climb in the last three months, even recording record highs in some cities, according to a report by property website Idealista.

According to their data, the price of rental housing in Spain increased by 0.3 percent in the last three months, with the average cost of renting a m2 in Spain now €11.80. Year-on-year prices registered a rise of 9.3 percent.

Today, despite the legislation, paying rent in almost 90 percent of Spanish cities is equivalent to more than half of the minimum wage.

Why is this happening?

The main reason is that demand for rented properties has risen so fast that the market cannot absorb it. In simple terms, market supply cannot keep up with the growing demand. "There is currently a considerable imbalance between supply and demand. Tenants account for an 80 percent share, and owners only 16 percent," says María Matos, director of research at Fotocasa.

According to Idealista's Francisco Iñareta, the housing law is not working: "After four months since it was applied, it seems clear that [the law] has not achieved its main objective: to contain the price of rental housing."


"Supply continues to be drained and potential tenants are finding it increasingly difficult to access rental housing," he added. "There are fewer flats and more people looking, so landlords always choose the one who offers them the most security."

It should be noted, under Spanish legislation, landlords may not raise the price of their contracts already in force above the percentages outlined by the government, but unfortunately, this rental cap does not apply to new contracts signed, nor those signed after 2019.


Where are rents rising the most?

34 Spanish provincial capitals now have higher average rental prices than before the Housing Law was approved.

In the larger rental markets, price increases have been widespread in the last three months. Significant increases have been recorded in Barcelona (6.6 percent), Madrid (5.1 percent), Alicante (4.6 percent), Valencia (4.2 percent) and Málaga (3.4 percent).

The year-on-year increases in major cities are even more stark: in Valencia rents have gone up by 22.1 percent, and in Alicante (18.6 percent), Barcelona (18.1 percent), Málaga (17.9 percent) and Madrid (10. 7 percent).


The largest quarterly increases were in Santa Cruz de Tenerife, where rents went up by 10.2 percent, while in San Sebastián and Lugo the increases were 6.8 percent.

These record rises have caused new record prices in four out of every 10 Spanish capitals, in total 21 provincial capitals: Ávila, Barcelona, ​​Burgos, Castellón de la Plana, Granada, Guadalajara, Logroño, Lugo, Madrid, Murcia, Oviedo, Pamplona, ​​Pontevedra, Santa Cruz de Tenerife, Seville, Soria, Tarragona, Valencia. Valladolid, Vitoria and Zaragoza.

In addition to the supply and demand imbalance in the Spanish rental market, many experts feel that another reason for the sharp rises in rental prices is external pressure from tourist and short-term accommodation, two forms of renting outside the legal remit of the Housing Law and something encouraged by Spain's digital nomad visa.



Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also