Rises of up to 33% in rents in Madrid if the Government applies its new index to intervene in prices

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An apartment on Avenida Villaviciosa de Alcorcon that is currently rented at 675 euros could become more expensive up to 1,156 if the price that comes out of the Government’s rental price index applies. Another, in this case one of 75 square meters located in Arganzuela, could go from the current 690 to a minimum of 795 and a maximum of 1,440. In both cases, it concerns the data obtained by the Rental Negotiating Agency after conducting a study on 29 of the homes that it currently has rented.

At the time, the index was received cautiously by the sector, which saw it as a good basis for the future, but incomplete. Until the last quarter of 2020, it did not include prices for 2019, so it will take almost a year for the data corresponding to the pandemic to be reflected.

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Manuel Romillo, executive director of the Rental Negotiating Agency, considers that if the Government wanted to intervene in rental income and used the index for this, “most rents would rise in price quite a bit.” In his opinion, using “a statistical index of a structural nature, based on the exploitation of tax sources in 2018” in 2021 and in a market “that is clearly conjunctural and changing”, is “inconceivable and methodologically impossible” .

In almost all the cases studied, applying this index would mean a rise in the rental price; on average, 33%. The increases in rents start below 100 euros (the lowest value is 10 euros), but they can also exceed 300 (in one case, even 1,000), always according to the study data.

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Thus, in 79% of the dwellings (23 of the 29 analyzed), the average income indicated by this State System of Reference Indexes of the Housing Rental Price is higher than the rental price they currently have, according to the data January 2021. In case of using the price range established by the p75 percentile (of the three values ​​provided by the index, it is the one that could most favor the landlord), all owners could raise the rent.

Regarding the median income, only six homes have higher prices right now to which it establishes this value, in ranges that oscillate between 1.2% and 18%. However, if the 25th or 75th percentiles were applied, they would all be within the band; one of them is the aforementioned Alcorcón.

Likewise, ANA considers “particularly worrying” the seven cases in which they have detected that even the 25th percentile (in principle, the one that should help lower rents the most) is above its current price.

It should be remembered that the index is not binding, but rather, in the words of the Ministry itself, “a tool whose objective is to establish a system to offer a reliable and contrasted information base to know the market situation of residential rent “. We can have presented a Non-Law Proposition to limit the maximum rental price in the areas where it has risen the most, which contemplates the use of “legislative, statistical and information tools to prepare a reference index of the rental price “.

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