The new annual update index of housing rental contracts, which was expected for this month of December, has already been defined by the National Institute of Statistics (INE) as reported this Friday by the Ministry of Housing and Urban Agenda (MIVAU). This is intended to regulate the updating of rental contract rents.
The indicator that had to be ready by the end of the year, as established in the Housing Law, will serve as a reference limit for rent updates, with the aim of offering stability to both owners and tenants. avoiding excessive increases in rents.
After its publication in the Official State Gazette, BOE this Friday, it will have effective from next January 1, 2025. From this date it will apply to all lease contracts signed on or after May 25, 2023, the date of entry into force of the Housing Law.
According to Europa Press, the Secretary of State for Housing, David Lucas, highlights that with this measure the Government reinforces its commitment to transparency and security in the rental market. “This is a tool to provide more transparency and give security to landlords and tenants”he stated in a statement.
What will the new index designed by the INE be like?
According to the agency, the index designed by the INE is based on a methodology that combines different economic indicators. Among them, the Consumer Price Index (CPI), underlying inflation and the annual variations of both stand out. In addition, a parameter is incorporated that contemplates long-term growth expectations, developed in collaboration with the General Directorate of Economic Policy.
A key element is the application of a moderating coefficientproposed jointly by the General Directorate of Housing and Land of the Ministry of Housing and Urban Agenda and the General Directorate of Economic Policy of the Ministry of Economy, that takes into account the particularities of the rental market at all times.
The end result is a benchmark that monthly will be published with two decimal places and will be used as a limit for updates to lease contracts.
In accordance with current regulations, the Annual rent increase may not exceed the lowest of these three rates: the annual variation of the CPI, the annual variation of underlying inflation or the adjusted average variation rate established by the index itself.