July 12, 2018 / 3:30 PM / 11 days ago

Spain strengthens tenants' rights in rental market

MADRID, July 12 (Reuters) - Spain is introducing a series of measures to strengthen legal protection for people who rent their homes, and temper rising prices in bigger cities, Development Minister Jose Luis Abalos said on Thursday.

Home-building, buoyed by foreign investment, is thriving in Spain 10 years after a property bubble burst, and the new Socialist government is now looking to rein in some areas of the market.

“We need to make sure the housing stock is mainly allocated to satisfying the right to housing, safeguarding its social function,” Abalos told a parliamentary commission.

Buyers of rented property will have to respect the terms of existing tenants’ contracts, impeding a post-crisis phenomenon whereby cash-strapped local authorities sold social housing to private equity firms that subsequently raised rents.

Abalos also proposed regulatory and fiscal measures to encourage owners of empty properties to let them.

Over the next 4-6 years, 20,000 affordable homes for rent will be built, Abalos said, adding to a supply which currently makes up for just 2.5 percent of Spanish housing stock, according to the OECD. This compares with 14 percent in France and 18 percent in Britain.

Curbs will be placed on deposits or other guarantees that landlords can demand from tenants, and the government will aim to ease access to credit to help people rent.

Abalos said he wanted to “balance the rights of landlords and tenants as much as possible”. (Reporting by Belén Carreño; writing by Isla Binnie; editing by David Stamp)

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