300,000 tenants in Spain hold their breath for the ‘great rent hike'
The Spanish rental market has had a particularly turbulent time in recent years. This is especially true in the post-pandemic period, when an explosion in short-term tourist rentals combined with supply shortages have sent prices soaring and forced locals to spend up to half their income on rent or, in many cases, leave their neighbourhoods altogether.
Now things could be about to get a lot worse for hundreds of thousands of tenants across Spain. According to figures from El País, over the course of 2025 more than 300,000 households in Spain will see rental contracts signed in 2020 expire, a year in which the pandemic prompted a large number of rushed renewals and new leases as people sought out security.
In 2019, Spain's Law on Urban Leases (LAU) was amended, extending the duration of contracts from three to five years, or seven if the tenant is a company. Therefore, contracts signed after the change will begin to expire in 2025.
Spanish law also establishes that contracts be updated in the case of properties owned by individuals, who make up the majority of landlords.
This means that a huge cohort of tenants could face rent hikes of between 20 and 30 percent, according to conservative forecasts.
However, this figure varies significantly depending on the source. While real estate portals, which usually base their figures on asking prices, not actual contracts, report increases of close to 40 percent, other experts, such as José García Montalvo, a professor at Pompeu Fabra University, who told El País that the real increases would likely not exceed 30 percent, based on tax records from the tax agency.
In any case, even the most conservative estimates seem to confirm that the rent hikes will be substantial for low and middle-income households across the country.
For many, leaving their tenancy will not be an option because the volatility of the rental market means prices are going up everywhere and a 20-30 percent increase may be their best option.
According to price data from Idealista, the average price of rental housing in Spain in April 2020 was €10.7 m2 per month. By the same period of 2025, it had risen to €14.3, an increase of 38.3 percent.
This means that tenants paid an average monthly rent of €856 for an 80 m2 property in 2020, but in 2025 the same property would cost €1,144 per month. In cities such as Madrid, Barcelona and Valencia, as well as in the Balearic and Canary Islands, prices have more than doubled in some areas.
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