On December 31, the validity of the decree law ends with economic measures in response to inflation and the consequences of the war in Ukraine, among which is the application of a 2% limit on the annual renewal of rental contracts household. The Government must announce before the end of the year if it extends this and other measures includingIt also adds new provisions to continue lowering inflation, on the underlying rate, that without unprocessed food or energy products.
At the end of last November, the party eh Bildu confirmed his support to the General State Budgets (PGE) after reaching an agreement with PSOE and Podemos, by which the Executive promised to extend the limit of 2% in the annual update of the rents of the rental contracts to all 2023.
In the absence of knowing the final content of the new decree, which is expected in the coming days, the housing rental contracts that correspond to their annual update during December will see a increase limited to the current 2%, linked to the Competitiveness Guarantee Index (IGC).
The renewal of the rental of a two-bedroom apartment-type home will have an updated line of about 704 euros per month nationwide, after an increase of 14 more euros per month, which is equivalent to a increase of 166 euros per yearaccording to the study carried out by idealista, the real estate marketplace in southern Europe. But despite the same type of increase, the updated income is not the same throughout Spain.
After updating the rental prices signed in December 2021, the largest increase in rent will be in Barcelona, where they will rise about 18 euros per month on average to a new price of 938 euros per month during the next year. The annual increase reaches 221 euros. Behind the Catalan capital appear Saint Sebastian, with an updated rent up to 918 euros/month, which means 216 euros per year. Complete the highest rent trio Madridwith an income of 867 euros/month, more than 200 euros per year.
Other capitals like Bilbao or Palma They are close to 200 euros per year in order to place a new average income of 816 euros/month in the homes analyzed.
On the other hand, the rentals that renew during December in 14 capitals will hardly experience a rent increase of 10 euros per month. In some like Cáceres, Ciudad Real, León, Ourense or Zamora, the increase will be less than 100 euros per year. The Galician capital and the Castilian-Manchegan capital will have the most affordable updated rents, below 400 euros/month
The difference between the current limit of 2% and a renewal linked to the CPI is close to 400 euros per year
The final data of the evolution of the Consumer Price Index (CPI) in November, which confirms its rate at 6.8%, maintains the Government’s thesis that it is necessary to intervene in the rental market to “avoid, within the framework of the same contract, an excessive impact on people and tenant households of housing”.
When the Executive adopted on March 29 the urgent measures of the national response plan to the economic and social consequences of the war in Ukraine, the inflation rate in February had reached 7.6%, at that time its maximum value in the last 35 years. “The CPI has ceased to be, temporarily, an adequate reference for the application of the annual updates of such contracts “, it is stated in the published decree in it State official newsletter.
The situation worsened in the following months, with increases of 9.8% in March or reaching peaks in June (10.2%), when the decree was renewed until December 31, in July (10.8%) and in August (10.5%). Since last summer, the inflation rate has moderated to the current 6.8% year-to-year in November, the lowest data recorded since January (6.1%), when the war in Ukraine had not yet broken out, and not these emergency economic measures had been implemented.
Now with the CPI below the rate at which the government intervened in the rental market of dwellings, it is possible to calculate how much the renewal of the rental contracts referenced to this index would have entailed.
The renewal of rents at 6.8% would have meant an average increase of more than 560 euros per year at the national level, and left a new rental fee of close to 740 euros per month on average in Spain for two-bedroom type housing. . The difference between the application of one index and another is close to 400 euros per year (IPC vs. IGC in November).
Among major markets, leases renewed this December in Barcelona would have seen an average annual increase of 750 euros, compared to the current 220 euros/year (530 euros of difference per year), with a new rental income updated to more than 980 euros/month.
For his part, in San Sebastianthe renewal of the rent would have placed a new average rent of 960 euros/month, which would have meant more than 730 euros per yearalmost 520 euros more than year rent.
In Madridan update of rents referenced to the current CPI would have left almost 700 euros more per year for rent, with a new rental price of almost 910 euros/month, which would have meant 490 euro difference with the current limit of 2%.
Behind, other capitals such as Palma and Bilbao They would also have led to increases in rents above 650 euros per year for an updated rent that would exceed 850 euros per month. It would have meant 460 euros more annually compared to the current regulations for updating housing rentals.
