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Owners are shielding themselves from a 2% rent cap and new contracts have more than doubled the rise in the CPI



In November, the government decided to extend the 2% ceiling on the increase in lease contracts linked to the development of the consumer price index throughout 2023. A measure that was part of the first anti-inflation package that the executive branch backed out at the end of March last year, after the outbreak of the war in Ukraine, has been This resulted in the tenants not losing their purchasing power in a giant step. But in the face of this intervention, the market has prevailed again and there are already thousands of renters who have paid for it: new leases have risen in prices dramatically and do so three times as much as the CPI (5.7% in December). The alert has been triggered by the Appraisal Association, suggesting that the action has caused landlords to increase the initial price they are asking prospective tenants. An effect that is already reflected at the same time on the prices of the contracts that were formally drawn up in the months in which the measure was in effect. According to data from Alquiler Seguro, new rents averaged 14% in December, while existing rents, which are mostly protected by the government, only increased 5%. “What the owners do is defend themselves. They sign the contracts at a higher price than they planned because then they can’t raise it with the CPI,” says Consuelo Villanueva, director of institutions and large accounts for the appraisal association. “The problem is the uncertainty of the owners. They don’t know if and for how long there will be more extensions. This is what can shake the rental market, adds the expert. This conclusion is supported by the data. After several months of price increases in new rents past the 2% cap, these have tended to moderate. In October and November they started to slow down, but the legal uncertainty created by the announcement of the measure’s extension pushed them over €800 on average. The increase could be higher in the major Spanish cities. Specifically, the provincial capitals in which the rental price grew the most in December were Girona (+23.61%), Zamora (+22.04%), Alicante (+22.03%), A Coruña (+16, 49%), and Barcelona (+ 16.47%), according to data from the real estate portal pisos.com. The rise in prices in Catalan cities is remarkable. For about a year and a half (between September 2020 and March 2022), rents remained limited in more than fifty municipalities in the region under the Provincial Rent Containment Act passed by Parliament, until the Constitutional Court declared it null and void. Maximum leases in March last year. But since the cessation, prices have not stopped rising in the regions of Catalonia that have requested to be classified as aggravated, and this happens not only because of the abolition of the limits, but also because during the time that the law was in force, thousands of landlords decided to sell their properties or dedicate them to the tourist market, which Display level throttle. According to a study by Pompeu Fabra University and the Association of Promoters of Catalonia (APCE), during the validity of these caps in Catalonia, rental prices in the region decreased by barely 5%, while the available supply fell by 15%. “It has been proven in Catalonia that reducing prices has not improved the market, but has caused a decrease in availability and that, in addition to extending the limit to 2%, causes an increase in prices,” he explained to this newspaper. , Attorney and Partner of Círculo Legal Barcelona, ​​Arantxa Goenaga. For the expert, rules such as the ceiling set by the executive only serve to calm the market because they “interfere with measures that only favor defaults and policies that discourage investment in real estate but rather impose on owners.” Related Record News Yes, the government imposes partial rent control under the guise of Guillermo Ginés. Annual increases are limited to 2% and expiring contracts are extended for six months and the damage ends up being paid by the tenants. says Ferran, director of line studies pisos.com. There is more damage to them. Because with the 2% cap, not only have prices skyrocketed, but other landlords have taken advantage of the end of existing contracts to “eliminate certain tenants or put the house back on the market for rent improvement,” notes the Appraisal Association’s Villanueva. Some of the practices that United We Can have already noticed and due to which they started to freeze contracts for their PSOE partners in the last package of anti-inflationary measures approved in the last days of 2022. Until June 30th, landlords will have to extend expiring lease contracts by six months. Housing Act And all of this happens when a government regulation with massive allegations of rent interference is about to expire. According to the general manager of the rental negotiation agency, Jose Ramón Zurdo, the increases in new contracts are also a result of landlords fearing the effects of a housing law that PSOE and United We Can could put through Congress. The current law already provides for a freeze on contracts like the one currently applied to small landlords. Only in this case it will not be for six months, but for at least three years. The time when a neighborhood or municipality can be declared an area under pressure from municipalities and communities.

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