Hundreds of thousands of tenants are awaiting a call in the coming months from their landlords who would prefer this not to happen. The major rent review that Spain will experience until the end of 2026 is very worrying due to the exaggerated increase in rents. … over the last five years. The more than 300,000 contracts that the sector estimates need to be renewed or liquidated throughout Spain –Social rights takes that figure to over 600,000 – they’re practically priced out of the Covid-19 era, which was the last episode in over a decade in which rents fell. But too much has changed since then. For some time now, rents have skyrocketed in Spain, by around 40% on average, and in the major capitals the increase has been even greater, which represents a headache for tenants, who will now have to make a much greater financial effort to pay the rent. The battle to prevent these rents from rising is already being waged within the Government with Add by pressing PSOE to expand these revenues by force.
The majority of these contracts awaiting renewal are located in large capitals such as Madrid And Barcelonawhere prices increased by 52 and 60% respectively, according to data from Idealistic. Taking the example of the Spanish capital, this means that whoever signed the rental of an 80 square meter apartment in November 2020 for 1,152 euros (14.4 euros m2) per month, after having revised their contract after five years, could now pay 1,824 euros per month, 672 euros more if we do not take into account the annual updating of rents which was limited from April 2022 to December 2024 at 2 and 3% by the Government.
Rental in Madrid
The monthly rent for an 80 square meter apartment in Madrid now costs more than 1,800 euros, 52% more than during the pandemic.
Also note the 56% increase in rents in Malaga or the 75% which increased in Valence for five years. In Spain, the average rent price at the end of 2020 was 10.7 euros per square meter and it is now 14.5, which is equivalent to the rent for an 80-meter apartment which increased from 856 euros per month to 1,168.312 euros, or 312 more (+36%).
The rental contracts that must be renewed in 2026 are those that were signed after the worst of the pandemic, in what was the great return to the office after the months of forced teleworking that many professionals took advantage of to return to their hometown. Today, after five years, the Law on Urban Leases (LAU) allows the contract between owner and tenant to be terminated (seven years in the case where the owner is a legal entity). After this period, the owner can choose between recovering his accommodation, extending the current rent annually for up to three years maximum, or entering into a new contract with the same tenant and thus being able to demand a higher rent.
But it is precisely on this last point that Sumar wants to intervene, and this is why he is now increasing his pressure on the PSOE. The fuchsia formation wants the price of all contracts awaiting renewal to be frozen and forcibly extended for three more years, even in areas which are not declared as stressed by the Housing law. They also ask that in the areas concerned where these extensions in favor of the tenant are already in force, two additional years be added, so that the owner cannot recover his accommodation within 10 years.
Leadership in housing in Sumar has been taken by the Ministry of Social Rights led by Pablo Bustinduywhich presented this week a report in which it is indicated that the renewal of the rental contract in 2026 for a household with average income would have an annual impact of 1,735 euros. They also assure that there are 632,369 contracts which end in 2026 and that there are 1.6 million people – 2.7 million if we also count 2027 – who are waiting for what will happen to their rents. According to the same department, Madrid (145,881 contracts and 404,090 people), Catalonia (112,728 contracts and 300,984 people), Andalusia (85,491 contracts and 213,728 concerned) and Valencian Community (62,523 contracts and 155,057 people) are the communities where the major revision will have the most impact.
For the moment, the PSOE seems to ignore Sumar’s proposal, but the formation of the Yolanda Diaz He wants to die by killing so that this measure can be applied by royal decree before the end of the year. From the far left of the Executive, they even managed to suggest a few days ago that they would take the initiative of Delegated Commission of the Government for Economic Affairs (CDGAE)the previous filter to decide which economic measures achieve Council of Ministersto force her PSOE partners to vote for her.
Industry reaction
However, the measure threatens to cause another earthquake in the residential sector after constant interventions carried out by the government over the past three years. From the Association of owners for rent (Asval) They emphasize that it is an “ineffective and counterproductive” initiative, because from a “technical point of view” it does not reduce prices, “but rather discourages supply, delays investments and ends up generating more pressure on new contracts, which are precisely those that are today facing the greatest tensions”.
Furthermore, the owners’ lobby believes that the proposal raises “serious legal doubts” because “this modifies legitimate contractual expectations, introduces regulatory insecurity and can border on economic retroactivity”. Furthermore, Asval points out that “it also does not protect those who need it most.” “Such a freeze only benefits current tenants, but harms those looking for housing, particularly vulnerable households, because it further reduces the available supply,” they argue.
According to Asval, The solution to improving the rental market is to increase supplyguaranteeing stable legal certainty, providing tax incentives for affordable rentals and strengthening direct aid to vulnerable households, “measures that tackle the underlying problem without distorting the market”.
About The Author
