Spain is going through a period of political instability with three general elections in the last four years, followed by a censure motion some months ago that brought the current Socialist Government into power on the back of a fragile coalition that has since fallen apart and forced the Socialist Prime Minister Pedro Sánchez to call another General Election, which takes place today. What do the main parties propose in terms of housing policies at a time when rising housing costs in Spanish cities and some coastal areas are a political hot potato? Here are the main points from each manifesto:

POSEO – Socialists centre left

• Establish a basic emancipation income for young people on low salaries to help them afford housing
• Make public land available to build more social housing for rent

PODEMOS – Far left

• Impose rent controls and indefinite rental contracts
• Limit mortgage debts to the value of the property for borrowers in distress
• Make banks pay past and present mortgage related taxes
• Prohibit evictions with no alternative housing
• Confiscate empty homes for social housing

CITIZENS – Ciudadanos liberal centre right

• Centralise housing laws to replace regional laws
• Increase the supply of social or public housing for rent
• Create a register of rental contracts
• Introduce new laws against squatters to speed up evictions and make it easier for Communities of Owners to initiate eviction processes

POPULAR PARTY – PP centre right

• Increase tax breaks for landlords and insurance protection from late or non payment of rent
• Harsher punishments for squatters and more support for landlords to recover their property from squatters
• Scrap stamp duty (AJD) on mortgages for main homes
• Provide public land for building new homes

VOX – Nationalist far right

• Deregulate the rental market
• Reform the laws governing Real Estate Investment Trusts, known in Spain as SOCIMIs
• Liberalise the planning process for all building land unless protected for some reason
• Allow owners to use violence in the defence of their property

The policies that get implemented depend on the election results. The most likely scenario, with a 60% likelihood based on research by the Spanish daily El Pais, is a hung parliament with no working majority probably followed by fresh elections (grey area in chart below). The next most likely outcome with 30% probability is a left-wing coalition led by the Socialists including Podemos (in red). The probability of a right-wing coalition between the PP, Ciudadanos and Vox has a 10% chance (blue). So, as things stand, the policies most likely to be on the agenda of the next Government of Spain will come from the Socialists and Podemos. That would be bad news for funds investing in Spain, and probably not good for the housing market. Let’s see what today brings.