The housing rental market will maintain the 2% limitation on the annual increase in lease contracts that so stipulate throughout 2023. Those rentals that have to renew in January will see a increase close to 170 euros per yearaccording to the study of idealistic. In Barcelona, San Sebastián or Madrid, the increase exceeds 200 euros per year. With the current inflation, rents would have registered a rise of almost 480 euros per year, after knowing the inflation data for the closing of 2022, at 5.7%.
It has been 10 months since last March 2022 the Government of Pedro Sánchez announced a limit on the increase in rents for those renters who have to renew their contract, within the package of measures to alleviate the economic consequences of the war in Ukraine . Initially, it had a three-month application, but it was renewed last June until December 31, and again extended for all of 2023, shortly before the deadline at the end of last year.
A measure that was promised to be temporary, given the current economic situation, will last for at least 21 months. The rental contracts of dwellings to which their annual update throughout 2023 will see their increase limited to the current 2%, linked to the Competitiveness Guarantee Index (IGC). Whereas, until the entry into force of the decree, rent renewal was linked to the Urban Leasing Law (LAU) which, in general, applied the Consumer Price Index (CPI), and which in its latest data December registered a rate of 5.7%. This supposes a moderation of inflation, with more than five points below the peak reached last July (10.8%).
For practical purposes, the renewal of the rental contract for a two-bedroom apartment will have an updated rent of about 715 euros per month at the national level, after this increase limited to 2%, and which is around 15 euros more per month. month compared to the previous income, which is equivalent to an increase of almost 170 euros per year, according to the study carried out by idealista, the real estate marketplace in southern Europe. The exact data can be seen in the table below.
By province capitals, this limited renewal of rental income implies a different evolution of prices. Rentals that have to update their contract in Barcelona during January you will see a annual increase in rent of 228 eurosuntil reaching an average income of 969 euros/month, for the typical two-bedroom dwelling.
It is the most expensive capital, this time ahead Saint Sebastian, which ‘stays’ on the rise of 216 euros per year, and establish a renewed rent of 918 euros per month. From behind, appears Madridwith a new updated rent of 908 euros per month, which means an increase of 214 euros per yearthat is, 18 euros each month.
After these three cities, the prices of Bilbao (842 euros/month of updated rent), which means an annual increase of 198 euros, and Palma (816 euros/month of rent), with an increase of 192 euros per year.
On the other hand, among the cities with annual rent increases below 100 euros are Teruel (367 euros/month of new rent after renewing), Ourense and Ciudad (both with 383 euros/month) or Lugo (408 euros/ month).
The difference between the current limit and the renewal linked to the CPI exceeds 300 euros per year
With the moderation of the inflation rate, which closed December at a rate of 5.7%, the difference between the calculation of the rent increase with the current limit of 2% and the data that comes from continuing to link the renewal of rental contracts to the IPC.
A renewal of contracts in January at the current rate of 5.7% It would have meant an average increase of almost 480 euros per year at the national level, and would have left a new rental fee of 740 euros per month on average in Spain, for the typical two-bedroom dwelling. The difference between the application of one index and another is just over 310 euros per year.
Among major markets, renewed leases in Barcelona with the CPI (from December) this January they would have seen an average annual increase of 650 euros, compared to 228 euros/year with the current limit of 2%, with a new updated rental income that would have exceeded 1,000 euros/month. The difference between one rate and another is more than 420 euro per year.
For his part, in San Sebastianthe renewal of the rent with inflation would have placed a new average rent of 951 euros/month, which would have meant more than 615 euros per year400 euros more rent per year.
In Madridan update of rents referenced to the current CPI would have left almost 610 euros more per year in rent, with a renewed average rental price of more than 940 euros/month, which would have meant something less than 400 euros difference with the current limit of 2%.
Behind, other capitals such as Palma, Bilbao or Valencia They would also have led to increases in rents above 500 euros per year with updated rents that would exceed 790 euros/month. It would have meant more than 330 euros annually above the current regulations for updating housing rental contracts.
It should be remembered that the last Competitiveness Guarantee Index (IGC) published in December, and corresponding to October, reached its highest rate of 8.6% since it is published. The IGC index establishes a price revision rate consistent with the recovery of competitiveness vis-à-vis the Eurozone. This rate will be equal to that of the Harmonized Consumer Price Index (IPCA) of the EMU less a part of the loss of competitiveness accumulated by Spain since 1999.
And it is that the Law itself that set it in motion, the Law 2/2015, of March 30, deindexation of the Spanish economy (BOE 03/31/2015), establishes that when the variation rate of this index falls below 0%, this value will be taken as a reference. AND when the rate of change exceeds the ECB’s medium-term annual inflation target (by 2%), This value will be taken as a reference.
