The usual thing around these times is that people start talking about New Year’s resolutionsprojects, trips… plans for 2026 that is already around the corner. That’s the usual. In Spain there are thousands of families who face the year with a very different feeling: restlessness. They are tenants, they have been residing in rented houses for years and now they see how their contracts are about to expire in a very different scenario to the one they had when they signed them, back in 2021.
Things have changed so much that there are those who estimate that some tenants will have to pay up to 4,600 euros more per year if they don’t want to move.
What has happened? For thousands of Spanish families, 2026 will not be the year of North America World Cup nor that of Eurovision without Spain. 2026 will be the year in which they will have to decide whether to move or agree to pay much more for their homes.
The reason is a phenomenon that some have baptized as “the big rental review” and in practice it is nothing other than the expiration of the contracts signed between 2020 and 2021. After the five-year extension that marks the lawnow many tenants have to sit down and negotiate with their landlords.
But that’s normal, right? Correct. Contracts signed from 2019 onwards last five years if the landlord is an individual or seven if it is a company. During this period they are renewed annually automatically and the normal thing is that the rents are updated in a controlled manner, based on the CPI or the IRAV index. That hasn’t changed. What is special about the rental contracts signed in 2020 and 2021 is that they were agreed in a very specific context, conditioned by the impact of the crisis of COVID-19.
It comes with taking a look at the price chart of Madrid prepared by Idealista to understand it. After years of moderate rent increases (or stagnation), in mid-2020 rents began to become cheaper and did not recover until well into 2021, when they gained momentum that continues even today.
What does that mean? That if you signed a rental contract in January, February, March… 2021, you did so at an advantageous time that has kept you ‘safe’ these last five years from the price increase that the market has accumulated. Now, once that agreement expiresif your landlord wants to renegotiate the contract, he will do so in a very different context, with rents in maximum values.
Has rent become so expensive? Yes. Until now we could get an idea thanks to platforms like Idealista. Now we have a theoretically more precise tool: calculations from the Ministry of Social Rights and Consumption prepared from data from the INE, the Tax Agency and the IEF.
The results has advanced them The Country and they show that contracts that must be renewed in 2026 will become more expensive by up to 383 euros per month compared to the time of the original signing, which translates into about 4,600 euros more per year. That would be the forecast for the most extreme cases (not the average), but it is eloquent.
Is there more data? Yes. The estimates of advanced consumer The Country show an estimate of how much rents will rise per year for a household with a median income. For Spain as a whole, this calculation shows an increase of 1,735 euros. In the case of the Valencian Community it would reach 2,686, in the Canary Islands 2,267, in Madrid 2,042, in Cantabria 1,869 and in Andalusia 1,952.
In the rest of the regions analyzed, the increase in median income ranges between 1,408 and 884-329 euros/year, the latter data corresponding to Ceuta and Melilla.
And the calculation of 4,600 euros/year? It comes out of the heaviest estimate, the one that corresponds to the Balearic Islands. There the Consumption data show the increase in rent prices can exceed 4,615 euros per year. As a reference, Idealista indicates that in March 2021 the residential square meter was rented on the islands at 11.2 euros. Today it is above 19. If we take an 80 m2 apartment as a reference, that means that a tenant who five years ago paid 896 euros/month today would have to pay 1,528. That is, 632 more.
When managing the advanced table by The Country It is worth keeping several keys in mind. To begin with, it does not include data from the Basque Country or Navarra due to their regional regimes. Nor from Catalonia, since one relevant part of the population resides in declared neighborhoods “stressed market areas”which influences their prices. The increase calculations also seem to have been carried out with respect to the values at the signing of the contract (2021), which leaves the doubt as to whether they have taken into account the updates of recent years.
Another fundamental factor is the context: the estimates are based on a portfolio managed by Sumar, which takes time pressuring its government partner to extend hundreds of thousands of rental contracts about to expire.
Does it affect many people? The answer is once again positive. At least if we take Consumption as a reference. After examining the data from the Household Panel, Pablo Bustinduy’s department has come to the conclusion that in 2020, 568,500 contracts and in 2021 another 632,300. The first ones have been completing their five years of validity in recent months. The latter will begin to do so from January, affecting 1.6 million people.
The communities that will (potentially) be most affected are Madrid, Catalonia, Andalusia and the Valencian Community. The first saw 145,900 contracts signed in 2021, affecting some 404,100 people. In Catalonia, 112,700 and 301,000 were recorded respectively, although there the tenants have the declaration of stressed areas in their favor. In Andalusia there are some 85,500 contracts with 213,700 affected tenants and in the Valencian Community there were 65,500 agreements with 155,000 people involved.
Anything else? Yes. The figures must again be interpreted as approximations, since factors come into play that are beyond calculation. Not all contracts last five years (some are extended by their landlord for seven years) nor do all agreements signed in 2021 have to remain in force today.
Another handicap is that there is more points of the country declared stressed market areas and that there may also be homes in points that, due to their low demand, have a different behavior from the rest of the market.
Images | Taisia Karaseva (Unsplash) and Florian Wehde (Unsplash)
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