Nearly two years after Spain’s much-publicised Housing Law came into force, its promised benefits are increasingly being called into question, as new research shows substantial discontent among both tenants and landlords.
Tenants say: it’s harder to find a place to live
A recent survey by property portal Fotocasa reveals that 49% of tenants now believe the Spanish Housing Law of 2023 has made it more difficult to rent a home—up from 37% a year ago. In stark contrast, only 17% feel the legislation has helped them, while 34% remain neutral. So much for housing the nation.
The controversial law, officially known as the Law for the Right to Housing, aimed to make housing more affordable, support vulnerable groups, strengthen tenant protections, and expand public rental housing. But the reality is proving more complex, especially for those currently hunting for a rental.
A law meant to help renters may be hurting them instead
According to María Matos, Director of Research at Fotocasa, the law does offer protection to existing tenants by capping annual rent increases. But for those looking for a new place to live, it’s a different story altogether.
“The law has unintentionally triggered a 30% drop in rental supply,” Matos explains. “This has created more price pressure and reduced mobility in the market.”
Tighter controls have reportedly driven many landlords to remove their properties from long-term rental markets altogether. In a country already grappling with limited accessible housing, this trend is adding fuel to the fire.
Landlords aren’t thrilled either
Not surprisingly, property owners share similar concerns. Almost half (48%) say the law has made it harder for them to rent out their homes. The percentage hasn’t budged since last year.
On the flip side, 11% now believe the law actually makes the process easier—an increase of five points compared to the previous year. Still, 41% remain indifferent, not exactly a ringing endorsement.
Perhaps more telling is that 39% of landlords have either removed or are considering pulling their properties from the rental market due to the law. That figure has jumped from 28% just a year ago.
This withdrawal is most acute in Catalonia (48%) and Andalusia (47%), compared with 29% in the Community of Madrid and 34% in the Valencian Community.
From long-term rentals to holiday lets
Faced with mounting restrictions and dwindling returns, many landlords are pivoting toward short-term letting. The survey shows 34% are thinking of switching from year-round to holiday rentals.
This shift is most pronounced in Andalusia, where 51% of landlords see this as a viable option. The same sentiment is shared by 46% of landlords in the Valencian Community, although it drops to 33% in Catalonia and only 24% in Madrid.
Nationally, a clear majority—66%—still reject moving into the holiday rental sector, at least for now.
Renting rooms instead of homes
Another trend on the rise is the move from whole-property rentals to individual room lettings. About 28% of landlords have either taken or are considering this approach, up from 22% a year earlier. The practice is particularly popular in the Valencian Community (46%) and somewhat so in Andalusia (38%).
This strategy allows landlords to maintain some rental income while skirting around stricter rules governing traditional leases. However, it may not be a welcome shift for those seeking the security and stability of a full home.
Falling behind on maintenance
As if this wasn’t enough, nearly half (47%) of property owners say they will invest less in maintenance and upgrades due to the new regulations. That’s two points higher than the previous year.
This cutback is most common in the Valencian Community (61%), followed by landlords in Andalusia (47%), Catalonia (42%) and Madrid (38%). Reduction in upkeep could lead to a deterioration in housing quality—ironically undermining the very concept of ‘the right to housing’.
Conclusion: reforming reform?
What was intended as a protective framework for tenants is, according to the data, becoming a stumbling block—restricting supply, stalling rental turnover, and prompting landlords to reconsider their role in the long-term rental sector.
With mounting frustration on both sides of the rental equation, the Spanish government may soon need to revisit its flagship housing reform. After all, the dream of affordable, long-term rental housing for all is beginning to look more like a mirage than a roadmap.
