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The landlords raise the rents in case of default and occupation: paying the rent costs almost 400 euros more than paying the mortgage


Leasing has recovered from increases in availability following the impact of Covid-19. Tenants are the worst off in this situation

Poster for renting a house in Madrid.
Poster for renting a house in Madrid.EFE

Buying a home costs more and more and mortgages are more expensive, but renting is no longer what it once was and is becoming an alternative. the most remote and least accessible option. Inflation, legal insecurity and fear of non-payment has led to landlords raising prices as a protective measure and this has driven up the price and effort required by tenants to pay the payments.

According to a comparative study published by iSavings, the rental fee has risen by 7.78% in just six months, that is, we have gone from paying an average of 990 euros per month to paying 1,067 euros. In the case of mortgages, the fees have gone from 674.45 euros in March to 673.33 euros today. In other words, it is, on average, 393.24 euros more expensive to pay a monthly payment to the landlord face mortgage payments.

It is one of the consequences of a rental market that has recovered the affordability increases after the reduction during the confinement of the coronavirus and the tenants are the worst affected in this situation: they have to pay more , try harder and face. more stringent requirements to convince the owners to sign a contract.

Regarding effort, for paying a mortgage with an average repayment period of 24 years and an average fixed interest rate of 2.64%, the effort has barely increased in six months and stood at 26.45%, compared to 26.37% of March. Quite the opposite has happened to rents, where the effort involved in paying a lease has gone from 38.71% in March to 41.89% today.

Price increase

With the rise in inflation and its impact on the purchasing power of families, added in recent months the increase in prices by owners, who seek in rents in a way to offset their income. The Government established a limit of 2% in the revisions of the contracts already in force, however, the increase in the new contracts is significant.

“September starts with an 8% increase in rents if we compare it to last year. The landlords are increasing the rent price in response to the 2% limit set by the Government for updating the rents, in an effort not to lose purchasing power in the future,” he says Borja de Andréscommercial director of the Rent Negotiation Agency (ANA).

According to the experience in their offices, the owners of the premises they don’t want to lose purchasing power. “You don’t know how long the limitation will last and they don’t want to lose more money with the rent, that’s why they raise the price.”

They also try to cover themselves against possible non-payments by tenants in the current situation of economic uncertainty, and there is a growing fear of illegal use of houses. In the absence of data that would allow a more specific picture of the situation to be found, the alarm around this type of case is conditioning the owners who put their houses on the market. “They see that there is a greater risk due to the suspension of the launch and due to the lack of regulatory measures in view of the urgent phenomena related to the occupation,” explains De Andrs.

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