January 19, 2021

The town councils may limit the rental prices

The town councils may limit the rental prices


Intervene prices. Although experts agree that the solution to lower rental prices is to increase the supply of housing for leasing, the PSOE and Podemos believe that the solution to stop the escalation of rental prices is for administrations to set prices. This is included in the General Budget Agreement of the State 2019 that both formations have signed. Among the measures that it includes, it is included that the municipalities can elaborate a "reference rental price index" for periodic review. Those who consider it, "may declare, temporarily and exceptionally, a stressed urban market area when there has been an abusive increase in rental income from a habitual residence". In these areas and for a limited time, the consistories will be able to "regulate and limit the abusive increases in the rental price".

The project also includes the possibility that the competent public administrations "exercise right of first refusal and retraction when the rented dwelling is sold jointly with the other dwellings or premises owned by the lessor that are part of the same property and when they are sold jointly by different owners to the same buyer all the floors and premises of the property ". The Ministry of Development has declared that one of its objectives is to have a park of 20,000 homes for social rent in four years and this could be a way to nourish it faster than building them.

PSOE and Podemos also want to modify some aspects that affect the rental agreements. Among other measures, they propose that no additional guarantees can be agreed to the deposit in cash up to a maximum of two monthly installments of the rent. In addition, they establish that the right of the landlord to recover the house before the legally established deadline must be included in the lease agreement. The period of mandatory extension of rental contracts from three to five years will also be extended and the tacit extension from one to three years for natural persons will be extended. The agreement states that if neither of the parties had notified the other, at least six months before that date, their willingness not to renew it, the contract will be extended for another three years.

The agreement establishes a gradual increase of the State Budget for housing. For the next year, if approved, includes a game of 630 million euros, 38% more than in 2018. The intention of both parties is, if they continue to govern, increase to 700 million in 2020 and reach 1,000 million euros in 2021. Within a period of ten years, both formations consider that Spain should invest 1-1.5% of GDP in housing policies.

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