The National Statistics Institute (INE) has a four-month window to publish the new reference index that will cap rent increases on existing leases, establishing the yearly percentage a landlord may raise rent starting next year. Until December 31, renewals are limited to 3%.
The creation of this index is a mandate embedded in the housing law, which states in its eleventh supplementary provision: “The National Statistics Institute shall define, before December 31, 2024, a reference index for the annual update of housing lease contracts that will be fixed as a reference limit for the purposes of article 18 of this law, with the aim of preventing disproportionate rent increases.”
Historically, rent was linked to the Consumer Price Index (CPI). After the pandemic, the Russia–Ukraine conflict, and rapid price surges, the government briefly capped increases at 2% for all of 2022. The measure was extended to 2023 and then set at 3% for 2024.
Currently, from the public body led by the veteran Andalusian socialist Elena Manzanera, there is no clear signal about the data underpinning the new indicator. Asked in May by this publication, officials stated that “technicians are working on it” and that the measure “will be defined before the end of 2024.” An August update found no response from INE to this newspaper.
Within the sector, rumors suggest the new index could resemble the housing rental price competitiveness index, which is based on the Harmonized Index of Consumer Prices (HICP) but capped at a maximum of 2%. This aligns with the ECB’s long‑term inflation target. In this way, sharp increases in existing leases are avoided, though the adjustment will still be reflected in the market and in new leases.
A separate reference index from the State Housing Rent Price Reference System
The new reference index for the annual update of housing leases should not be confused with the State Housing Rent Price Reference System, created after the housing law’s approval. The latter began operating in March and limits the maximum price for new lease agreements in areas identified as under pressure. It applies to large landlords or properties that have spent five years off the rental market as primary residences, depending on the autonomous community.
Although this indicator, which sets a price range, is nationally available for all property types, it is currently in force only in Catalonia, the only autonomous community that has requested de facto zones. By contrast, the new index will apply nationwide. Another difference is that the existing indicator was established by a panel of experts appointed by the Ministry of Housing with input from other representatives, while the new index is under the sole responsibility of INE.
Rent renewals still reference CPI, capped at 3%
Through year’s end, lease renewals remain capped at 3%, and if the CPI turns out lower, that lower figure will define the limit. For instance, in February and July this year, inflation fell below 3% year over year, registering 2.8% in both cases. This cap remains the maximum increase allowed for renewals within those thirty‑day windows, even if the absolute cap is higher.