The Housing Law, which came into force in March 2023, introduced important reforms. One of them was the rental price update-index. This indicator indicates how much rents can rise from 2025 onwards, and its main lines are already defined.
What is the rental price update-index
The percentage that a landlord could increase the rent was linked to the Consumer Price Index. In 2022, with the high increase in the CPI, it was decided to unlink it from it to avoid excessive increases. The New Housing Law set a new benchmark, establishing an index to be prepared by the National Institute of Statistics.
Rents increased by 2% in 2023 and 3% in 2024. From January 2025, we'll consider the new index, updated monthly, and will be less volatile than the CPI.
It is important, however, to remember that the new index only applies to habitual housing contracts signed after the new Housing Law was entered. The rest will be updated again according to the CPI.
How is the new indicator calculated?
The calculation of this index to update the rental price will take into account three aspects:
• The annual rate of change of the CPI.
• The annual rate of change of underlying inflation (excluding food and energy products).
• An adjusted average annual rate of change, considering the evolution and forecasts of the two previous indicators and a moderating coefficient.
This indicator will be published on a monthly basis and the percentage that can be applied to raise the rent will be the lowest of the three values. The first value, which will be published on 2 January, will be of a special nature since it will be based on November data. From February onwards, the index will be published in the middle of each month, taking the immediately preceding month as a reference.
How much can the rent increase in 2025?
It will depend on each case. Firstly, we need to check whether the contract includes a clause to update the rent and the date of signing it. In addition, if the landlord did not apply the rent increase in 2024, he may do so in 2025 on a cumulative basis and always within the margins provided by law.
In the contracts subject to the new reference index, we will have to wait until January to know the first value. It could be around 2.2%, but we must not forget that the calculation depends on the economic data of the previous month. Therefore, that figure could change each month.
In the coming months, we'll see the effects of this new index on the very stressed rental market.
However, if you are looking for a property to rent as your habitual residence, holiday home or even as an investment, go to Spainhouses.net to find a broad offer to choose from.