Alarming number of renters in Spain are at risk of poverty

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at risk of poverty

Spain has the highest number of tenants at risk of poverty or social exclusion in the European Union. This is evident from the 2023 annual report of the Spanish Central Bank. Nearly half of the population that rents a home faces this risk.

The percentage is 45%. This puts Spain above countries such as Malta and Romania, where the percentages are also high, but not as extreme as in Spain. According to Eurostat, the average rate in the EU in 2022 was 31%. Spain is far above that.

Tenants vs. general population

Only 15.9% of households in Spain lived in a rental property in 2021 according to the Spanish National Institute of Statistics (INE). For the general population, the at-risk-of-poverty or social exclusion score was 26.5% in 2023, which is almost 20 percentage points lower than the score for renters. This difference highlights the seriousness of the situation for tenants in the country.

Economic gap between tenants and landlords

According to a report by fact-check website, the income of landlords in Spain is 2.15 to 2.58 times higher than that of tenants. Experts warn that the rental market is a major cause of social inequality. This economic gap contributes to the deepening of the poverty problem among tenants.

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Increased holiday rentals are putting pressure on the housing market

What is not helping the rental market is the unbridled growth in the number of holiday homes. Homeowners prefer to rent to tourists than to regular tenants, because the first group pays more. This increases the pressure on the housing market. Holiday homes now make up 10% of the rental housing market in the country and 1.8% of the total number of primary homes. These are estimates based on data from real estate portals collected by the Bank of Spain. The rise of holiday rentals in recent years has led to a decrease in the availability of homes for regular residence, which has driven up both purchase and rental prices. For ‘ordinary’ tenants, this means a greater chance of significant rent increases, which increases the risk of poverty. They often do not have an alternative.

Focus on key tourist areas

The phenomenon is mainly concentrated in tourist zones, including urban areas such as Málaga, Marbella, Elche and Palma de Mallorca. The central districts of large cities with many tourist activities, such as Barcelona, Madrid, Seville and Valencia, also suffer from this problem. In the suburbs of Marbella, Málaga and Elche, the number of holiday homes even exceeds the number of regular rental properties, and in Marbella this also applies to the city center.

Also read: Critical shortage of affordable rental properties in Spain

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