The royal decree that allows tenants of homes whose rental contract ends between March 22, 2026, and December 31, 2027, to opt for a two-year extension simply by sending a burofax to their landlords will be voted on next April 28. Along with this extraordinary moratorium, the new regulatory framework that came into effect on March 22 also includes limiting the annual update of contracts to 2%. And in the current economic context, with emerging inflation as a consequence of the war in Iran, this brake on future increases, if ratified, could relieve potential beneficiaries by up to 658 euros cumulatively over the next two years in the worst-case scenario, according to calculations made by Sumar in a report released this Thursday.
Extending the conditions of rental contracts over the next two years is the main objective of the royal decree approved by the coalition government three weeks ago, as part of the package of measures aimed at mitigating the economic effects caused by the war in Iran. According to the initial calculations made by the Ministry of Consumer Affairs, nearly one million households could claim this extension, since many contracts signed during the pandemic would be about to expire, considering that the average duration of these is five years.
However, this figure is a mere estimate, as it overlooks other realities, such as contracts that may have ended before their original expiration date for various reasons, or those signed with large holders, in which case their validity would be seven years and would fall outside the dates contemplated by the new regulation.
In the study released this Thursday, Sumar has calculated the economic impact that limiting annual increases to 2% would have on tenants’ pockets. Taking this cap as a reference point, along with existing lease contracts whose annual review is still subject to the evolution of the CPI — unlike new contracts that will be governed by the housing rental reference index (IRAV) provided for in the Housing Law — as well as the Bank of Spain’s projections regarding the evolution of the CPI for 2026 and 2027, the report accounts for the amount of various plausible savings in different inflationary contexts.
Thus, in an adverse scenario with inflation at 3.9% in 2026 and 2% in 2027, “free indexing would place the median monthly rent at 623.4 euros the first year and nearly 636 euros the second,” the text indicates. “The unavoidable application of the 2% cap ensures a direct saving of 11.4 euros per month in 2026 and almost 12 euros per month in 2027.” In total, the regulation would retain 276 euros.
With somewhat lower projections of cost of living increases, 3% in 2026 and 2.5% in 2027, the accumulated savings, Sumar estimates, would amount to 182.5 euros. While in a much more unfavorable framework, with sharper increases (5.9% in 2026 and 3.2% for 2027), the impact of the cap on increases would be the highest, 658 euros.
Greater impact
Based on these general cuts, the Sumar report emphasizes that they would be much more pronounced and, therefore, beneficial, in places where housing pressure is higher. This is the case in the Community of Madrid, where the “2% firewall” would cause savings of 364 euros, 240 euros, and 867 euros in the three inflationary scenarios mentioned above. In Catalonia, another of the hottest rental market areas, this same belt would lead tenants to save 331 euros, 219 euros, and 790 euros, respectively, also under the same forecasts.
Since the new royal decree was published in the Official State Gazette, Sumar — which pushed the PSOE to include these two measures within the general package after a several-hour walkout that delayed the start of the extraordinary Council of Ministers — has tried to meet with parties opposed to its ratification. And this measure does not currently have sufficient parliamentary support to be ratified, after the rejections from PP, Vox, UPN, and Junts, who form the majority. That would mean its automatic repeal.
However, even if the royal decree fails, the Government has conveyed the message that tenants who sent the burofax while this new framework was in force will be able to benefit from the extension. There is, however, legal controversy regarding this.
If you have doubts, suggestions, or simply want to tell us your case, you can send us an email at vivienda@elpais.es.
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