Housing rents may rise by a maximum of 2.15%, below inflation.

Rental rents that are now reviewed may rise by a maximum of 2.15%, according to the index, which was published on Wednesday by the National Statistics Institute (INE). This indicator applies to contracts signed after the entry into force of the housing law, in May 2023. The INE has been publishing this information since last November and to set the index it takes into account general and core inflation (without energy or fresh food), and establishes a reference value of 2%, which is the medium-term inflation target set by the European Central Bank (ECB).

The housing law establishes a series of price containment measures for rents and assigns the INE to establish this indicator of the annual rise in rents. Rents were in most cases updated in line with the CPI, but when inflation soared after Russia’s invasion of Ukraine in 2022, the government decided to limit rent rises to 2% for 2023 and to 3% for 2024. By 2025, this index published by the INE has already started to be applied. The updates occur annually, so landlords who have to revise the rent to their tenants can apply this increase at most, although there is the possibility of extending the rent for 5 years if the owner of the property is a private individual or up to 7 years if it is a large investor.