Legal uncertainty is leading to a decline in the supply of standard tenancies, with real estate agents reporting more its impact on more than 5,758 offers over the past ten days. According to them, landlords have withdrawn or diverted from the residential rental market 4,235 properties. In addition, 1,523 contracts have been put on hold.
The coalition government attempted to push through measures to improve access to housing via two decree-laws. The first contained, among other provisions, a ban on evictions until 2030, new regulations on holiday lets and room rentals and a two-year extension of existing tenancy agreements due to expire before 2028.
The other decree included measures that, in practice, made tenancy agreements open-ended, in line with the demands of the tenants' union. Neither of the two texts secured the backing of Parliament, which has sparked one of the largest social protests and has led to an early general election on 29 November.
Despite this, the government has decided to reissue the decrees and approve them through Diputación Permanente.
According to real estate agents, an average of 3.78 rental properties are being withdrawn each day, meaning that over the last ten days the supply has plummeted by 2,067 properties, according to figures from the FAI (national federation of estate agents' associations), which represents more than 600 agencies across the country.
The exodus of properties from the rental market is not the only consequence of the new measures. Many small landlords are also choosing to take their properties off the market to put them up for sale. As a result, more than half of estate agents have confirmed that, on average, 2.26 properties have recently been withdrawn from the traditional rental market, amounting to more than 1,224 homes.
Other types of tenancy
The impact on available stock is exacerbated by the shift towards other types of tenancy and the reallocation of listings towards seasonal or room-by-room rentals, with an average of 1.76 properties per agency and 944 reallocated over the last ten days. This type of letting is not currently regulated. However, if the decree is ultimately passed, it will have to be justified, and if this is not achieved, it will become part of the traditional letting market.
Furthermore, estate agents are also reporting a slowdown in business, with an average of 2.75 tenancy agreements that were due to be signed but have ultimately been put on hold due to uncertainty surrounding regulatory changes.
FAI warns that the figures could rise further, as the fall in the volume of rental transactions over the coming weeks could be between 25 per cent and 30 per cent, due both to a slowdown in new contracts and to properties being withdrawn from the market, as well as the diversion of flats normally available for rent to other uses.