Poster for renting a house in Madrid.

Updated

Leasing has recovered the unstoppable increases after confinement by Covid-19. The tenants are the worst off in this situation

Poster for renting a house in Madrid.EFE
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Buying a home costs more and more and mortgages are more and more expensive, but renting is ceasing to be the alternative it once was and is becoming a remotest and least accessible option. Inflation, legal insecurity and fear of non-payment have led landlords to raise prices as a protection measure and this has triggered the price and the effort that tenants must bear to meet 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, paying a monthly payment to the landlord is, on average, 393.24 euros more expensive to face mortgage payments.

It is one of the consequences of a rental market that has recovered the unstoppable rises after the decline during the coronavirus confinement and the tenants are the worst unemployed in this situation: they have to pay more, assume more effort and face tougher requirements to convince the owners to sign a contract.

With respect to effort, for the payment of 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 of what has happened in rentals, where the effort involved in paying a lease has gone from 38.71% in March to 41.89% today.

Price increase

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

“The month of September begins with an increase in rents of 8% if we compare it with last year. The landlords are raising the price of the rent in response to the 2% cap set by the Government for the updating of rents, in an attempt not to lose purchasing power in the future,” says Borja de Andréscommercial director of the Rental Negotiating Agency (ANA).

According to the experience in their offices, the owners of the dwellings they do not 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 scenario of economic uncertainty, and there is also a growing fear of the illegal usurpation of homes. In the absence of data that would allow a more specific picture of the situation to be obtained, the alarmism around this type of case is conditioning the owners who put their houses on the market. “They perceive a greater risk due to the suspension of the launches and due to the lack of regulatory measures in the face of the pressing phenomenon of the occupation,” explains De Andrs.

Source: www.elmundo.es

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J. A. Allen

Author, blogger, freelance writer. Hater of spiders. Drinker of wine. Mother of hellions.

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