Do you know that the rental price in the province of Barcelona in December 2023 compared to the same month in 2022 has increased by 12.1%? These are some of the data published by idealist. Without a doubt, it is a worrying fact since there is increasingly more demand and less supply of long-term rental housing, which causes rents to increase. To avoid this problem, the so-called Housing Law was prepared and approved in May 2023 and Catalonia will be the first autonomous community to regulate and limit the rental price.
In the city of Barcelona the average price per square meter in December 2023 was 20.5 euros. The lowest price was recorded by Igualada with 7.9 euros per square meter. The average in the province of Barcelona was 17.5 euros per square meter. They are very high prices that have not stopped growing and that represent a difficulty for anyone who wants to rent an apartment.
Regulation of rental limits in Catalonia
In 2022 the Constitutional Court declared unconstitutional the Catalan law that established the limit on rental prices. However, in 2023, the so-called Housing Law was approved at the state level, which established these limits for the entire national territory.
This new regulation regulates important terms such as stressed market areas, the definition of large holders and limitations on income updates. In this sense, the Generalitat of Catalonia has been the first to ask the Ministry of Housing for the power to regulate and limit rents in 140 municipalities where 80% of Catalans live. Among these municipalities We find the provincial capitals and most of the metropolitan area of Barcelona.
What does the Housing Law regulate at the state level?
The Housing Law , at the state level, regulates aspects related to:
– Access and protection to housing, as well as the conditions of the rental contracts.
– Measures to guarantee the right to decent housing (which is contemplated in the Spanish Constitution) and adequate, especially for the most vulnerable groups, such as people in situations of social exclusion.
– The definition of the so-called stressed market areas which are those in which there is a high demand for housing and a shortage of supply, which allows specific measures to be applied to control rental prices.
– The amount of the income and the limit regarding its update. The Housing Law establishes that new rental contracts in stressed areas cannot have a higher rent than what they had until that moment and that the rent update cannot exceed 3%. If they are large owners, the price cannot be higher than the reference price index.
What is a stressed market area?
A stressed market area is a geographic area in which there has been an uncontrolled increase in rental housing prices. They do not coincide with a specific municipality or city, it may be a district in the center of a city or a larger area.
The objective is to define those areas in which access to housing is becoming a problem for people and to set maximum rental prices.
The Housing Law establishes that autonomous communities and city councils can declare stressed market areas in their territory. This declaration allows specific measures to be applied to regulate prices in housing rental contracts.
In order to establish the measures that limit prices, we must wait for the Ministry of Housing to publish the reference price index system in each territory, which will possibly be done in February 2024.
How is the rent of a housing rental contract updated?
Updating the rent in a housing rental contract is an important aspect for both tenants and owners.
According to the Urban Leasing Law, the rent can be updated annually, as long as this possibility has been agreed in the contract. If nothing has been agreed, it will not be possible to update the rent. the income.
If the parties have established that the income is updated, but have not agreed on a method or reference index, the competitiveness guarantee index will be applied. In any case, the increase that occurs due to the update of the income may not exceed the result of applying the percentage variation of the CPI on the date of each update.
It is essential to know and respect the agreements included in the rental contract and the regulation of the Urban Leasing Law to avoid conflicts between both parties and guarantee a balance in the rental contracts.
How does this new regulation affect apartment rentals in Barcelona?
Whether you are a tenant or an owner of an apartment in Barcelona that is located in a stressed area, you must consider the new regulation. We tell you the details below:
- If you are an owner.
- The first thing you will have to do is check if, in fact, the home is located in a stressed market area. Initially, the Generalitat of Catalonia has proposed several areas and we will have to wait to see if they are approved.
- If you have already rented the home before and you are a small owner (it is That is, you own less than five apartments), you will not be able to increase the rent compared to previous contracts. Only in the case of small owners who have carried out rehabilitation works in the last two years can the rent be increased by 10%.
- Find out about your rents. fiscal and administrative obligations: rental deposit deposit, registration of the contract, registration in the property registry or payment of taxes such as personal income tax.
- If you are a tenant.
- As in the previous case, you should check if the home is in a stressed area.
- Check the rent from the previous contract to verify that it has not increased. You can also review the reference index for the area since, if the rent is higher, it must be reduced to that limit.
- If the home has never been rented, the rent limit will be set by the reference index.
- Analyzes the way in which the income will be reviewed.
In summary, the entry into force of the Housing Law in Spain has generated significant changes in the rental market. If you want to rent a home both as an owner or as a tenant, it is important that you understand what this law regulates at the state level and which municipalities and areas will be affected by the limitation on rental prices.
However, the question arises: are these measures sufficient to solve the problems of access to housing in Catalonia?
If you need help renting your house or apartment and you are not clear about how the Housing Law affects you, contact us and our team of professionals who are experts in real estate law will advise you so that you comply with the law.
