Mallorca holiday property rental costs could rise by 20% this summer

Many British tourists could find themselves homeless

Thousands of properties have not been registered in time meaning they are illegal.

Thousands of properties have not been registered in time meaning they are illegal | Photo: Majorca Daily Bulletin reporter

| Palma | |

The new European regulations governing short-term rentals which came into force in Spain on July 1, including a single register for short lets, could not only exclude 70% of the current supply and cause losses of 13.737 billion euros for the economy between July and December, according to a warning issued by the Spanish Federation of Tourist Housing and Apartment Associations (Fevitur) but also push the price of holiday rentals up by as much as 20% in popular destinations like Mallorca.

Tony Redondo, Founder at Cosmos Currency Exchange, said prices could be raised by up to 20% in hot spots due to the law. BristolLive quoted him as saying: “Spain’s new Airbnb law will delist thousands of short-term rentals. British buy to let owners face income loss when the unlicensed properties are removed. Those who try and register will face higher compliance costs or have to sell.

“Pivoting to mid-term rentals for digital nomads is an option. Reduced short-term rental supply could raise prices by up to 20% in hotspots, pushing tourists to hotels. Other countries with more relaxed short-term rental rules, like Portugal and Italy, will attract investors, boosting tourism and property tax revenue.”

Pete Mugleston, Mortgage Advisor & Managing Director at Online Mortgage Advisor, said Brits letting out properties will look to Italy, Greece or Portugal instead of Spain. He continued: “If you’re a Brit with a property in Spain that you let out through Airbnb, these changes will have you pulling your hair out. The Spanish authorities are doing this to combat locals being priced out of the housing market, due to the explosion in the short-term rental market in recent years.

“This will add another layer of complexity to renting out your property and will more than likely be the final straw for many, as they choose to sell rather than rent. The result is that Brits looking to purchase a holiday home abroad to rent out will now turn their attention to other countries, such as Italy, Greece or Portugal, where regulations aren’t as strict.”

Fevitur said: “Families who have booked an apartment or holiday home are likely to be left without accommodation, as a large part of the legal supply cannot be registered in the Single Digital Window system and will disappear from the platforms,” explained its president, Silvia Blasco, in a statement. The organisation believes that the new system will lead to an increase in the black economy and a rise in illegal housing. The estimated losses amount to 8.57 billion euros for the Spanish economy in July, August and September, and a further 5.167 billion euros in October, November and December. Fevitur insists that this is a new system that encroaches on the tourism powers delegated to the autonomous communities.

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