Room rental in Spain: welcome to the Wild West of the real estate market

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room rent

Because rents in Spain continue to rise, many people are forced to rent a room. They can no longer afford to rent an entire home. But renting a room is also becoming increasingly expensive. The average price for this is €466 per month. And then the kitchen, bathroom and living room have to be shared with others.

Rents for rooms with access to communal areas have increased by 42% in the past five years. Owners looking for more profit try to circumvent regulations. Meanwhile, judges are increasingly starting to protect tenants. El País writes that in some cities, ​​the rent for a room is never lower than €500 per month. These include;

  • Barcelona,
  • Bilbao
  • Madrid
  • L’Hospitalet de Llobregat
  • Palma de Mallorca
  • Pamplona

On average, renting a bedroom, a bathroom, a living room and a kitchen (the latter three for communal use) now costs 42% more than five years ago and 76% more than in 2015, according to the portal Fotocasa.

A market in transition

Renting rooms in Spain has boomed in recent years. Unintentionally it is an important part of the lives of thousands of people. Where it used to be a small and affordable market, especially for students or starters, it has now become the only, but increasingly expensive, option for many tenants. It is an attractive alternative for homeowners to rent their homes for more money than they would previously have been able to do with long-term rental to one family, for example.

The rooms referred to here are often rented according to the Civil Code and not according to the Urban Housing, which, for example, prescribes a rental period of five years. The Ministry of Housing has already examined this rental form. This contributes to the increase in rental prices in cities. Minister Isabel Rodríguez indicated in an interview with El País on April 14 that she plans to regulate this practice because tenants are currently insufficiently protected.

More and more people are renting rooms because of high costs

According to Fotocasa, 44% of Spaniards share an apartment because they cannot afford the rent for an entire home. There is no official register for room rentals and it is difficult to track due to black payments. The Rent Price Observatory, compiled by the Fundación Alquiler Seguro and the Universidad Rey Juan Carlos, reports that room availability increased by 26.2% over the past year, while prices increased by 8.3%.

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Owners rent out rooms because of higher profits

The traditional rental of a home yields a gross annual return of 6.6%, while for rooms this is 9.5%, according to Fotocasa. Renting a room costs an average of €466, while a complete house of 80 square metres costs approximately €900 per month. With three rooms in a home, the gross return is therefore significantly higher than with conventional rental, says María Matos, director of studies and spokesperson for Fotocasa.

Taxation and regulations

Owners consider the room market to be more flexible and think they can avoid the new Housing Act regulations. Although this is not always the case, this type of rental does not offer tax deductions like traditional rentals. Sergio Cardona, analyst at the Rental Price Observatory, says that owners rent out rooms on a short-term basis because they think they can avoid housing and tourism regulations and tax controls.

Also read: Spanish homeowner circumvents new housing law with short-term rental

The experts see this development as a response to the new Housing Act that was introduced a year ago. According to them, the law has produced more political gains than actual help for tenants. Gonzalo Bernardos, an economist at the University of Barcelona, ​​emphasises that the law was mainly intended to win votes among young people. Ultimately, landlords responded by raising rents and focusing on short-term contracts and room rentals to avoid the new regulations. This has led to a significant increase in short-term rental agreements and room rentals, which now constitute a large part of the market.

Social changes due to the housing crisis

Thus, renting rooms has become a solution for a wide range of ages, not just young people. Eduardo Fernández-Fígares is a lawyer specialising in rental disputes. He confirms that more and more different groups are now renting rooms due to high prices and the shortage of complete homes. Although room rent formally falls under the Civil Code and offers owners more security, Fernández-Fígares warns that judges sometimes decide that room rent falls under the LAU is covered, especially if the room is the tenant’s main residence. This can entitle tenants to the same protection as with a complete home.

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