Sergio Nasarre-Aznar and Elga Molina-Roig
This paper aims to explain the main difficulties in the Spanish residential rental market becoming a true alternative to home ownership.
Abstract
Purpose
This paper aims to explain the main difficulties in the Spanish residential rental market becoming a true alternative to home ownership.
Design/methodology/approach
Currently, the Spanish rental market only meets temporary housing needs; it is very atomized and lacks professionalism. It does not provide an adequate legal framework to fulfil the parties’ aspirations (i.e. stability, affordability and flexibility for tenants; profitability, security and guarantees to landlords). The analysis of this proposition and the resulting proposal are based on six years of research, which started with the TENLAW European project.
Findings
Overcoming these constrains is essential to double the rate of residential leases in Spain and get closer to the European average, thus achieving a true diversification of housing tenures and avoiding future housing bubbles.
Practical implications
The paper makes a series of recommendations to legislators and policymakers to draft an adequate legal framework aimed at increasing the housing rental market share. This is based on the experience of mature tenancy markets in Europe, such as the German, Swiss and Austrian ones.
Social implications
The new proposed legal framework will help to transform the tenancy model in Spain into a functional one, making it more stable, affordable and flexible, while increasing safety and profitability for landlords. The model is also applicable, on a more general level, to all Mediterranean European countries.
Originality/value
Rethinking the regulation of tenancies, in a context of housing crisis and unaffordability (still a reality in many European and worldwide countries) has valuable potential for making this type of tenure more popular and for avoiding future housing bubbles.