Greece, Romania and Spain occupy the podium of European Union countries with a greater number of citizens who are forced to have to spend more than half of their income to pay rent.
The Housing Law seen by the experts: a step in the right direction that falls short
In the Spanish case, one in four people spends more than 50% of their disposable income to pay the monthly cost of their home, 26.2% A percentage that is relatively close to that of Romania, which reaches 29.4% ; and slightly ahead of what happens in Bulgaria, where it stands at 24.2%.
The gold medal in the effort to pay their landlords goes to Greece, where more than 62% of the population spends at least half of their income on rent, according to the data published by Eurostat for 2019, for which still do not include the evolution during the year of the pandemic and the economic crisis caused by it.
This need to lower the pressure in the effort to face rents is within the framework proposed by the new Housing Law, which, according to experts, is a step in the right direction, but falls short.
The application of a large part of the measures contemplated in the future text, which is still pending final drafting, will depend on its application by the Autonomous Communities and the Town Halls, which have transferred the powers. For example, regarding the recognition of stressed areas, where a reduction in prices will be required by large owners – companies that have more than 10 dwellings -, a measure that depends on the Autonomous Communities; or the IBI surcharge on empty floors, which corresponds to the Town Halls. And the Administrations headed by the PP have already advanced that they will not apply it.
Eurostat data show that the effort made by a large part of Spaniards, with respect to their disposable income, is far from what happens in other markets in our environment. In France, the percentage of citizens who spend more than half of their income on rent is 8.6%; in Portugal, 14.5%; and in Italy, 17.7%, slightly above what occurs in the European Union as a whole, where the average stands at 15.8%.
In the case of Spain, there is a downward trend in this requirement that began in 2014. It was that year when the highest peak was reached, more than 35%. Then Greece also hit highs, since it accounted for 75% of the population.
This evolution that Eurostat confirms corresponds to tenants who live in houses at market prices. In addition, there is another percentage of the population that has to dedicate more than half of its economic capacity to rent but who have low rental contracts, social or even at zero cost. In this situation, according to Eurostat, 6.3% of Spaniards are. The highest figure in this segment is that of Luxembourg, where it is 13.8%.
The figures in the rental segment contrast with what happens in the case of citizens who have a mortgage. There the pressure of having to allocate more than half of the income is significantly less, because it only affects 2.3% of the citizenry. In Greece, on the other hand, it reaches 13.7%. Country that, again, leads the ranking.
The latest Continuous Household Survey found that Spain is a country of homeowners, with fourteen and a half million households with a home owned (paid, inherited or mortgaged) compared to 3.2 million living for rent. This survey also highlights that the Community with the highest percentage of rental homes, at the end of 2020, was the Balearic Islands, with 27%. The least, Extremadura, with 10%.
41% have excessive rent
The data from the European statistical agency are not the only ones that point to this high pressure. CCOO points out that three million tenants (41% of the total) dedicate more than 30% of their income to rent, according to the report ‘Rental Housing in Spain’ published in February this year.
Their data, which take into account the Living Conditions Survey published by the National Institute of Statistics, are slightly different from those of Eurostat. They point out that almost 60% of the population that lives in rent allocates a maximum of 30% of their income to paying rent, while 22% dedicates between 30% and 50%; and about 20%, more than 50%.
The union points out that, on the other hand, owners who rent their properties have higher incomes than the rest of the population, given that 51% of landlords earn more than 40,000 euros a year.
According to this study, with data from 2019, socioeconomic vulnerability triples the risk of tenants of bearing excessive rent for their income. Specifically, 3.2 million of them correspond to households at risk of poverty or social exclusion.
And, the lower the income, the more effort. The Organization for Economic Cooperation and Development (OECD), the same institution that considers that Spain is at the bottom in the supply of social housing, finds that more than 70% of Spaniards with lower incomes – although it does not refer to the level of rent- they have to allocate more than 4 out of every 10 euros of their income to pay the rent of their home.