The National Institute of Statistics (INE) has already defined the new index of annual update of housing rental contractsthus fulfilling one of the mandates contemplated in the Housing Law, the Ministry of Housing and Urban Agenda reported this Friday.
Specifically, the Housing Law established a modification in the Urban Leases Law so that the INE could define, before December 31 of this year“a reference index for the annual update of housing lease contracts, which will be set as a reference limit, in order to avoid disproportionate increases in the rent of lease contracts.”
The Secretary of State for Housing and Urban Agenda, David Lucas, has highlighted that the Government is thus complying with a new mandate of the Law for the Right to Housing and that the Ministry will launch a system to help all citizens know how the price of your rental is updated. “A tool to provide more transparency and give security to landlords and tenants,” he stressed in a statement.
David Lucas has recalled that the objective that motivated the creation of this new index in the Law is to “avoid disproportionate increases in rent” to, ultimately, “safeguard rental prices.”
Thus, it has indicated that this applies to all lease contracts that have been signed after the entry into force of the Housing Lawon May 25, 2023.
In relation to the annual update of the rental income, the Urban Leases Law establishes that the increase produced as a consequence of the annual update of the rent “may not exceed the result of applying the percentage variation experienced by the CPI on the date of each update, taking as the reference month for the update the one that corresponds to the last index that was published on the date of update of the contract.
In this framework, the INE has developed a methodology for monthly determination of the index update in which the CPI, underlying inflation and the differences between the annual growth rates of both the CPI and underlying inflation for each month are considered jointly, and a parameter, defined at the proposal of the General Directorate of Economic Policy, which is related to the expected long-term growth of said index.
A moderating coefficient defined by a joint proposal of the General Directorate of Housing and Land of the Ministry of Housing and Urban Agenda and the General Directorate of Economic Policy of the Ministry of Economy, Commerce and Business will be applied to these differences, taking into consideration the circumstances. of the housing rental market.
This way, with the publication of this new index by the INE, the reference index that will be used as a limit for the annual update of housing lease contracts will be the minimum value between the annual variation rate of the CPI, the annual variation rate of underlying inflation and the rate of adjusted average annual variation, prepared as provided in the approved methodology.
Accordingly, the INE will publish monthly the reference index that will be used as a limit for the annual update of housing lease contracts, expressed with two decimal places, using the latest monthly data available.
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