STOCK MARKET WATCH -- Tuesday, 5 June 2012

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41. Is Spain finally going to be for rent?

http://elpais.com/elpais/2012/06/04/inenglish/1338818690_762457.html



Housing has become a chronic problem in Spain. But it was already a vexed issue during the property bubble of the last decade, when thousands of citizens were priced out of the market while thousands of others got themselves mortgaged for life. And it continues to be a problem now, when the financial crisis and soaring unemployment are preventing young people from moving out of their parents' homes even as the growing number of mortgage defaults are throwing entire families out on the street.

And all this is happening in a country where home ownership is the rule and rental homes represent a persistently small percentage of the housing stock.

Now, the Popular Party (PP) government of Prime Minister Mariano Rajoy is planning to bring more flexibility to the rental market with a set of measures that make it easier for landlords to get their properties back and for tenants to terminate their lease.

For instance, once the reforms are enacted, owners may demand that a tenant leave the property at any time regardless of the duration of the lease, while tenants will be able to walk out with just one month's notice. Until now, contracts were for five years by default, and a further three if neither party said anything to the contrary. The executive wants to bring these periods down to three years and one year, respectively.