The Ministry of Social Rights, Consumption and Agenda 2030 has increased pressure on the rental market with a double strategy: on the one hand, it has required large holders to comply with the new mandatory extension of contracts; On the other hand, he has warned that if the rent extension decree does not go ahead in Congress because the right votes “no”, this could have important social consequences on thousands of families and young people who could even have to return to live with their parents. One more measure by Consumer Affairs to try to contain the housing crisis in Spain that joins others such as the investigation of rental advertisements on large portals that did not comply with price regulations or the extension of evictions.
The department headed by Pablo Bustinduy has sent letters to 13 investment and real estate funds that manage more than 100,000 homes in Spain to remind them that they must accept the extraordinary extension of rental contracts that expire between March 22, 2026 and December 31, 2027, whenever the tenants request it. This measure, approved by royal decree-law on March 20, allows contracts to be extended for a maximum of two additional years while maintaining the current conditions.
According to Consumo, this extension constitutes a “new right” for tenants, which forces owners to accept it without the possibility of rejection, which represents a substantial change in the balance between landlord and tenant. The Ministry has also asked these companies for “maximum diligence” to immediately apply the standard.
The “no” from the right could leave thousands of people “on the streets”
The measure, however, is pending parliamentary validation within a maximum period of 30 days. In this context, Bustinduy has launched a call to all parties on the right or that are against the measure that if the decree falls, “thousands of people will be left on the streets.”
The minister has defended that the rule does not introduce extraordinary benefits, but rather guarantees the continuity of the contracts to avoid abrupt increases in rents which, as he has pointed out, can reach increases of 50% or even 60% at the end of the contract, something unthinkable for thousands of families. “We are talking about families who have their children in the neighborhood school or young people who would have to return to their parents’ house,” he highlighted.
In addition to the extension, the decree includes a 2% cap on the annual update of income until 2027, in line with the measures adopted to contain the economic impact derived from the international context, in particular the war in Iran.
Bustinduy has appealed to all parliamentary groups to negotiate the text, although he has directed his criticism especially at the right, which he accuses of defending the interests of large real estate operators. In his opinion, opposing the rule would be equivalent to allowing these actors to “find themselves disproportionately at the expense of throwing Spanish families onto the streets.”
A key decree in housing policy
The extension of rents is part of a package of urgent measures approved by the Government to deal with the rising cost of living and which has also been put on the table as part of the package of anti-crisis measures to deal with the war in Iran. Although the decree is already in force, it will only last one month and this has led the Executive to ask tenants to request the extension of their contracts as soon as possible.
The Government itself is confident that it will have sufficient support for its final approval, although the result of the vote remains uncertain. At the same time, the Ministry has increased its conversations with both the real estate sector and parliamentary groups, aware that the measure affects a particularly sensitive segment of the market and with important social implications.
In this scenario, the battle for housing is once again at the center of the political debate, with the Executive trying to shield a measure that, according to its defense, seeks to avoid a new wave of evictions in a context of strong pressure on rental prices.