Spain will regulate rental prices in areas where the demand for homes outstrips those on offer, Treasury Ministry Maria Jesus Montero said, the latest twist in a drawn-out internal spat between coalition partners Unidas Podemos and the Socialists. This is certainly the case in Mallorca where rents are some of the highest in the country.
"The regulatory package contemplates different parts (of the real estate market) which have to be regulated, among which is the fight against exploitative rental prices," Montero told reporters.
The hard-left Podemos advocates price caps without exceptions.
With social housing representing less than 2% of all homes according to the OECD, Spain lags far behind European peers such as Britain, France or Italy, where subsidised housing represents 17%, 14% and 4%, respectively, of each country's stock of homes.
"The debate centres around which instrument will best allow us to provide judicial security and respect citizen's rights, both the right to housing as a social function, and the right to private property," Montero added.
But landlord associations across the country have decried the move, saying the climate of legal uncertainty is deterring potential investors and individual landlords from renting their properties, reducing rental stock as a result.
"We think it's more effective to promote than to impose, and are working on several means of getting more homes onto the market at accessible prices... like tax incentives," Transport Minister Jose Luis Abalos declared on Monday in an apparent attempt to appease concerns about direct caps on rental prices.
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I totally agree with Steve, we already have a strict law in Spain that allows a tenant to rent for five years whether they’re good tenants or not, they have the right to continue to rent. People rent in Mallorca because this beautiful island is considered to be up market and more so a very safe place to live. If rents are forced to be reduced this could attract the wrong type of tenant.
Stupid notion. Any legislation detrimental to a landlord is contra-effective. Already the laws favouring the tenant are next to unworkable, and rental rates are proportionate to property values , and the costs of maintenance, rates and taxes and insurance that fall on the owner. If laws fail to take this into consideration landlords will think twice and the result will be much fewer properties in the rental market place.
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Zoe, before you rent make sure the deposit is registered with IBAVI - which it should be by law - and that problem disappears.
About time, not only to regulate the prices but there are so many other aspects of rental which allows the landlord abuse the system. For example, deposit is held by the landlord rather than a trust, which sometimes can take months before the deposit is returned to the tenant. Other one is that it seems landlord can ask for any amount of deposit they want, two months or three month , while in other EU countries and UK these are capped at maximum 1.5 time the monthly rent. It is time that the rental law looked at and regulated.