He housing market In Spain it has been a cause of concern for years. Many families have difficulty finding options in large cities, which has put policies aimed at controlling rents and guaranteeing access to a decent home on the table.
Recently, a video from a real estate expert has fueled this discussion. In his analysis, the professional exposes the positive and negative effects of the new limit imposed for the updating of rental income. But how does it affect landlords and tenants?
Index sets this month a cap of 2.2% in the annual update of rental contracts, a figure lower than 2.8% of the CPI corresponding to the same period. It was to be implemented as a response to the economic crisis generated by the COVID-19 pandemic, but it arrived late.
Regarding it, the expert believes that it will bring more bad things than good and assures that “overregulating the market is not necessarily the most effective solution for a problem as complex as access to housing.”
How would the expert solve the housing problem?
What can generate the most confusion, according to the expert, is the mismatch between contracts. Currently, contracts coexist that are updated according to the CPI, the competitiveness guarantee index or the new index. According to the expert, this fragmented scenario “complicates rental management and creates uncertainty between owners and tenants.”
He also questions the effectiveness of the new cap in the overall market context. «Does this limit really address the structural problems of the sector? There is most necessary measuresbut they require a comprehensive approach that goes beyond limiting income,” he says.
@sergioexcellencecircle New rental limit for all of Spain As of today we already know what the new limit is to update the rental income. My opinion? This index overregulates excessively. It was a government promise at a critical time (during COVID), and now they have fulfilled it. Let me explain: The new limit, which changes every month, is 2.2%. By the way, in this same period, with the CPI it would be 2.8%, so it goes down a few tenths. To whom will this limit NOT apply? There are contracts that are saved: 1️⃣ Long-term rental signed before the 2023 Law: These will continue to be updated with the CPI. 2️⃣ Temporary rental: At the moment, it remains unregulated. (Although I fear this will be for a short time.) 3️⃣ Commercial or office rental: They do not have the problems related to housing rentals and are not affected. The outlook right now: • Live contracts updating with the CPI. • Others with the competitiveness guarantee index. • And others with this new index. Does it make sense? The truth is that no. There are much more urgent issues to solve in terms of housing. What do you think? • Does this cap help the housing problem? • How would you cover the rent, if at all? Follow me for more analysis on the real estate market! #Rent #RentCap #RentRegulation #Real EstateMarket #Dwelling #IPC #RentalContracts #HousingCrisis #Real Estate ♬ original sound – Sergio_excellence_circle
In his analysis, the expert places emphasis on the issues that he considers most urgent to address the housing problem. Among them, the need to increase the supply of affordable housing stands out, facilitate access to property and promote public policies that stimulate the rental market in a sustainable way.
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