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PROPERTY

Stricter requirements and screenings: Why it’s getting harder to rent in Spain

Demand for apartments to rent is growing, especially in Spain’s big cities, but it is also becoming increasingly difficult to find one due to strict rules and prerequisites.

Published: 1 November 2022 17:58 CET
Updated: 6 November 2022 09:04 CET
Stricter requirements and screenings: Why it’s getting harder to rent in Spain
Why renting is getting harder in Spain. Photo: Jilbert Ebrahimi / Unsplash

The apartment is not open to people who work remotely, you need a contract of at least €2,100 per month, you need to be over 35 years old, you need an annual income of over €25,000 and you need to prove you’ve been working non-stop over the past two years.

These are just some of the unrealistic demands agencies and landlords and have been asking tenants recently across Spain. 

Increase in cost

According to the latest data, the average price of rental housing in Spain was €1,169 per month last month in September 2022, which represents an increase of 3.85 percent compared to August.

The values ​​vary depending on the city. In Barcelona, it stands at €2,312, in Madrid at €1,776 and in Valencia and San Sebastián above €1,300.

The price stood at €11.2 per square meter which is, 6.4 percent more than in 2021 and not far from the peak, which was seen two years before that.

In the case of Madrid city, the figure for September stood at €16.3/m2, which marks a year-on-year increase of 10.8 percent; and in Barcelona at €17.8/m2, with an increase of 20.3 percent. 

According to the housing website Fotocasa prices in the capital of Madrid have reached “historic highs”, and not only in the centre but also in the outlying municipalities.

READ ALSO: How much can my landlord legally increase my rent by in Spain?

Waitlists

The increase in demand for places to rent means that there are now long waitlists in some cities in Spain. People are missing out on rentals if they can’t make the viewing straight away.

And when they are able to get to a viewing, they’re having to make a decision on the spot and sign right away, because if they take a few days to think it over, they will lose out.

Agencies are also reporting that many young people are signing rental contracts without even going for viewings as they’re too worried they’ll miss out.

This is not just happening in places such as Madrid and Barcelona, but also in nearby commuter towns or even small towns nowhere near these hubs, such as Ferrol in Galicia.

READ ALSO: Where are the cheapest places in Spain to rent a two-bedroom flat in 2022?

More requirements

The greater demand for homes means that landlords can afford to become more choosy and are adding more and more requirements for people to be able to rent their properties.

Some of the most common demands are that tenants must demonstrate job stability, have a minimum level of income, be of a certain age and be willing to put down a considerably large deposit. But more and more requirements are being added by landlords all the time.

In Madrid for example, tenants are being asked for salaries of around €2,100, proof of work life in recent years, renters insurance and real estate agency fees.

According to the tech website Xataka if your rent is €1,776 per month and you add the agency fees and a one-month deposit, this would rise to €5,300, which you would need to pay out at the start. Many people are unable to spend these large sums all at once.  

READ ALSO: How to rent a property in Spain without a job contract

Not everyone is eligible  

Reports in the Spanish press have said that some landlords are going even further and discounting some tenants from the outset.

Examples include that they need be over 35 years old, that they pay the IBI (yearly property tax), which in Madrid is an average of €439 and they are prohibiting people who work from home.  

Many of these are increasingly difficult, especially for those who are not allowed to work from home, as many remote jobs increased during the pandemic.

Some potential renters are even having to undergo interviews and send in CVs to rent an apartment, a practice which has become common in places like New York, but up until now was very rare in Spain.

Looking ahead to 2023  

To help with the costs of inflation and to stop landlords from increasing rental prices as much as they want, the Spanish Government established a limit of a two percent rise.

This, however, is a temporary measure, and people are concerned as to what will happen afterward if inflation continues.

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PROPERTY

Spain’s plan to limit temporary accommodation rejected

Spain's left-wing government had planned to tighten its grip on temporary accommodation rentals as a potential means of making more long-term rentals available, but the country's right-wing parties on Tuesday rejected the proposal in parliament.

Published: 18 September 2024 11:53 CEST
Spain's plan to limit temporary accommodation rejected

If passed, the new law would have meant that anyone who wanted to temporarily rent a property would have to explain why and provide a valid reason.

For example, students or researchers would have to show the research contract or course booking to show it would only last a few months.

It would have also meant that if more than six months passed or more than two consecutive contracts issued, it will have automatically become a long-term habitual residence instead.

On Tuesday September 17th, the proposal was ultimately rejected in the Spanish Congress, voted against by Spain’s three main right-wing parties – Catalan nationalists Junts, Spain’s main opposition party the PP and far-right Vox.

The aim in part was to try and rectify the controversial Housing Law, which came into effect in 2023.

In most people’s eyes, the legislation has failed as landlords have found several loopholes to get around the restrictions, prices have continued to increase and the stock of rental properties is even more diminished.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

As a result of the fear of heightened regulation for landlords, many have left the traditional market and turned to tourist rentals or temporary accommodation instead, which are far more lucrative. 

This has had the opposite effect, increasing rental prices instead of stabilising or decreasing them.

READ MORE: Why landlords in Spain leave their flats empty rather than rent long-term

Seasonal contracts and room rentals allow landlords to raise prices every six or nine months and they not subject to the price limitations of the housing law.

The idea of this new law was to try and set the maximum duration of a temporary rental contracts at six months in order to avoid this, but it could have potentially also caused problems for many who need this type accommodation such as students, digital nomads, those living here on a short term basis etc. 

During the debate, Sumar’s spokesperson, Íñigo Errejón, defended the law saying that it is a “solvent”, “fair” and “precise” proposal, which will help “correct an abuse” and “close the gap through which “Landlords can use to avoid the LAU (Urban Leasing Law) and rent regulation”.  

Far-left party Podemos blamed the ruling PSOE for having left this “hole” in the housing law, but also agreed that the restrictions on temporary accommodation were needed to try and rectify this.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

Junts (Catalonia’s main pro-independence party) and the PNV, the Basque nationalist party, were firmly against it. They agreed that the problem must be solved and that “accessible decent housing was needed”, but raised the situation of students, interns, residents or workers who need housing for flexible periods.

Junts party member Marta Madrenas warned of the harmful effects that this limitation on temporary rentals can have for university cities such as Girona.

Vox and the PP meanwhile argued that they don’t want to help cover up the mistakes made by the left with regards to the Housing Law.

Vox deputy Ignacio Hoces stated that the increase in seasonal rentals has occurred due to the “failure” of the Housing Law, since this has caused rental prices to “skyrocketed” by 13 percent and the supply to be reduced by 15 percent.

Temporary accommodation, referred to as alquiler temporal or alquiler de temporada in Spanish, is considered to be anything that’s longer than a month but shorter than a year, middle ground between short-term and long-term rentals. It is also referred to as monthly accommodation or seasonal accommodation.

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