Why the moratorium on evictions in Spain will have a negative impact on the market
The Spanish government recently passed a law that imposes a moratorium on evictions. The ban applies to vulnerable and low-income categories of citizens, as well as squatters. This document has already caused much controversy among the public. For example, many property owners say that the law goes against their rights to return their property. In addition, it negatively affects the segment of social and affordable housing.
Under the new rules, a landlord has no right to evict tenants if they do not have enough money to rent another apartment or house. Squatters, people who squat on properties, including industrial properties, are also subject to the law. The effect of the law was originally adopted until May this year, but later it was extended.
In turn, experts say that the document has a negative impact on a number of processes in the market. It causes legal uncertainty in the protection of the rights of property owners. Now it is much easier to bypass the legal mechanisms of the lease, which is a direct limitation of the rights of owners. In addition, there is already a decrease in the volume of investment in real estate, which also leads to a decrease in the rating of housing as an asset for investment.
Analysts at Moody’s note that the introduction of this law is a logical continuation of trends that have been observed in the Spanish market for several years. Here, more and more pressure on the rights of creditors, which concerns the return of their property. In this regard, social risks for property owners are growing, which reduces their interest in investing in the segment.
An important problem is the increase in rights for squatters. In this case, there is a decrease in security for homeowners from a legal point of view. Experts predict that even after the end of the period of the law it will be extremely difficult to completely cancel its impact on the segment. It is possible that these measures will be replaced by others, which will increase dissatisfaction on the part of homeowners.
According to the law, a landlord can evict tenants only if the government provides them with alternative real estate. At the same time, the amount of social housing offered by the state is very limited. It accounts for 1.6% of the total number of homes in Spain.
For a long time, the issue of social housing has been on the back burner, both at government and regional levels, so it is not surprising that compliance with the law causes so many difficulties. Municipalities, although they will increase spending on this sector in this year’s budgets, are not enough to provide affordable housing for everyone.