One more month, and currently until December 31, 2022, the renewal of housing rental contracts is still capped at 2%. Since the entry into force of the decree in response to the economic consequences of the war in Ukraine in March, extended in June until the end of the year, the updating of rents has been decoupled from runaway inflation.
Since March (date of the decree), the CPI rate has exceeded 8% every month, being more than 10% in the last three months (June, July, a record of 10.8%, and August).
The limited increases of 2% will be maintained for the rentals that have to renew during this month of September, as long as it has been agreed in the contract. Remember that the last modification of the LAU of March 2019 specifies that the contract must expressly state the agreement between the parties for the annual update of rents.
Usually, the update is signed with reference to the Consumer Price Index (CPI), but must be specified. If there is no detail on the reference methodology, the annual variation of the Competitiveness Guarantee Index (IGC) will be applied, which is the rate that is being applied to all rentals established in their contracts.
Just 14 euros of monthly increase in renewed rental income
In the current context, tenants who have to review their rent during September will pay a average income of 694 euros per month nationwide, which means 14 euros more per month compared to a year ago. This represents an annual increase of 163 euros, according to the study carried out by idealista, the real estate marketplace in southern Europetaking as a reference the lease of a two-bedroom flat-type dwelling.
As in previous months, the big cities will experience the most notable increases, within the 2% income limitation. on this occasion Barcelona and San Sebastian They share the biggest updates, where rents will increase up to 18 euros more per month, to leave an updated rent at 918 euros/month on average, so they will exceed 215 euros more in rent per year. In Madrid and BilbaoMeanwhile, rents will remain somewhat cheaper, with an average of 867 euros/month, after an increase of 17 euros per month, just over 200 euros per year.
On the contrary, in cities like Ciudad Real, Lugo or Zamora the rise in rents will barely be noticeable between 7 and 8 euros more per month, so the annual increase will be less than 100 euros per year for tenants who have to renew their rent, and their new leases will become 367 euros/month in the first case and 408 euros/month in the last two.
With current inflation, average incomes would have risen by more than 850 euros per year
He National Statistics Institute (INE) has confirmed the final data of the Consumer Price Index (CPI) corresponding to the month August, which rises one tenth compared to the advanced data (10.4%) and closes at a rate of 10.5%, but it does mean respite compared to the data for July (10.8%), with three tenths less.
In the event that the renewal of the vast majority of housing rental contracts had continued to be linked to inflation, the rents payable would have grown to almost 700 euros more on average than is currently the case with the 2% limit.
At the national level, the median rent two-bedroom one-story would have reached 751 euros/monthafter applying a rise of 71 euros per month with the update to 10.5% of the August inflation rate, which would mean 857 euros more rent per year.
Of course, the renewal of rents in the big capitals would reach higher increases, with significant annual increases.
In Barcelona and Saint Sebastian, the average income would have gone to 995 euros/month, after an increase of 95 euros per month. This would have meant an annual rent increase of up to 1,130 euros per year. The difference with the current revaluation of rents is almost 920 euros annual.
In Madrid and Bilbao, the new rent would have been updated with this latest inflation by almost 90 euros more per month from now on, and would have left a new rent of around 940 euros/month in both capitals. The renewal of the average lease would have meant something more than 1,070 euros per year. The contrast with the annual update of rents at 2% that is being applied would be about 870 euros more per year, until the next annual review.
In other capitals like Palma or Victoria There would also have been annual rent increases of more than 1,000 euros per year, if they had continued to be linked to inflation. The average rent for a two-bedroom apartment would have risen by more than 85 euros/month to 884 euros and 912 euros, respectively.
