Spanish government introduces national rent cap in 'tense housing areas'

The Spanish government has introduced a new national price index to cap rents. The new system sets maximum and minimum price ranges for properties based on their location and characteristics. 

The cap will be applied in 'tense housing areas', those where average rents or mortgages are more than 30% of average household income or have risen at least three percentage points above the CPI over the past five years. 

For small property owners, the price range is informative, helping to assess whether current rents are in line with market rates. For large property owners, however, the range is normative and binding. 

The Spanish government is confident that rents in these areas will fall once the new index comes into force on March 13. 

Catalonia's rent index rejected

The declaration of a 'tense housing area' is at the discretion of regional governments, and the Catalan government has been pushing for its own system, a proposal now rejected by the Spanish government. 

The Catalan Minister of Territory, Ester Capella, said yesterday that "the rental market is not homogeneous" and that a standardized price index for all of Spain will not make rental prices decrease in Catalonia. 

Capella proposed that in 'tense housing areas', if the Catalan index is within the Spanish range, the limit will be set by the Catalan index, and if outside, the closer national limit will be applied. 

"The objective of the index is for the whole of Spain, so there has been an effort to standardize the proposal and make it applicable to the whole territory," said Secretary of State David Lucas.

If the Catalan index was applied, 140 cities and towns with 6.2 million inhabitants, representing 80.6% of the region's population, would be declared 'tense housing areas'.