In Spain, owning a home has been synonymous with stability for decades. Buying property is a safe haven in the minds of many Spaniards. However, it is becoming increasingly available to fewer people due to a very limited supply which has caused prices to rise beyond the purchasing power of our country’s wages. Rental homes, which are also more in demand and cost more, are not immune to rising prices. So much so that almost 40% of Spaniards living in a property they do not own have more expenses than income.

This is shown 2021 Financial Skills Survey published this week by Bank of Spain, which shows that this percentage – 37% for non-owners – is much lower for those who own a home (25%) and even lower for those who own more than one property, 18%. The situation could get worse given rising rental prices.

“Households living in rentals have limited savings opportunities,” commented the director general of economics and statistics at the Bank of Spain. Angel Gavilan, during the presentation of the survey. Moreover, due to their more vulnerable economic situation, “they have less access to credit,” the study also shows.

And the inflation crisis, from which housing did not escape, together with the loss of purchasing power of many families, led to a situation in which “the presence of a salary does not guarantee the ability to pay for housing,” as is condemned Jema Gallardo, CEO of Provivienda this Wednesday at a conference on this topic.

Elena Martinez, responsible for research and evaluation at the same organization, noted that in Spain 250,000 households fall into a situation of social exclusion after paying rent. And according to Idealista, the percentage of household income required to access a home is 21%, but in many provincial capitals more than 30 and 40% of income must be allocated to housing fees.

According to the real estate portal, based on third-quarter data, 43% of income should be distributed in Barcelona, ​​42% in Palma and 39% in Valencia. In Madrid the probability of accessing a rented house is 35%, and in San Sebastian it is 33%.

Consequences for the most vulnerable populations

Data Housing and Land Observatory of the Ministry of Transport, Mobility and Urban Program 2022 It has already been revealed that 41% of renters in Spain spend more than 40% of their income on rent. The situation is worse, the lower the income. According to the Organization for Economic Co-operation and Development (OECD), low-income households spend 47.4% of their income on rent. Spain is the eighth country with the highest percentage after the United States. Kingdom or Estonia.

Moreover, the constant rise in rental housing prices has even worse consequences for people with the lowest incomes because, as Martinez explained, it leads to movement of all people of different economic abilities towards “cheaper housing”, reducing to almost zero the supply available to the most vulnerable people.

According to Provivienda, people who rent are over-indebted than those who own a home and pay a mortgage. In particular, it disproportionately affects women, non-EU foreigners and young people.

Solutions

Solutions to this “overdiagnosed” problem, according to Javier Buron, a manager and social housing specialist who also participated in the Provivienda event, is having a tough time in the short term. Some of the issues discussed are included in the Housing Act: rehabilitate houses, reserve 30% of new buildings for affordable housing or increase public housing stock, as summarized. Sergio Porcelresponsible for the area of ​​social and urban cohesion at the Metropolis Institute.

Elga Molinaspecialist in residential rentals in the European context, explained the price control formulas that other countries in our midst apply, from a set of “reasonable profits” based on improvements that have been made to the apartment, to updating rents if they become outdated, as in France.

Molina defended it Revenue control must involve all parties because “otherwise it doesn’t work.” and concluded that rent controls should take into account housing regeneration to incentivize owners to be rewarded for these investments, and that the supply of apartments is of a higher quality.