Rising housing costs across Europe push the EU to act Credit : A_stockphoto, Shutterstock
Buying or renting a home in Europe is becoming increasingly difficult – and the EU now wants to act. With property prices up by more than 60 per cent since 2015 and rents rising across major cities, European lawmakers have backed a new plan aimed at making housing more affordable. The idea is simple: boost supply, support households, and ease pressure on a market that many say is no longer working.
For people living in Spain – including thousands of foreign residents – this isn’t abstract policy. It’s something you feel every time you search for a flat, renew a rental contract, or try to buy.
Why finding a home in Europe feels harder than ever
Across the EU, the gap between incomes and housing costs has widened steadily over the past decade. In many cities, buying a home now means committing the equivalent of eight to ten years of salary – sometimes even more in the least affordable capitals.
Renting hasn’t offered much relief. In high-demand areas, it’s common to spend 30 to 40 per cent of your income on rent alone. For younger tenants, that figure is often even higher.
You can see the impact in everyday life. People are leaving home later, sharing flats longer, and delaying major decisions like starting a family or buying property. Around Europe, the idea of owning a home – once the norm – is slowly becoming less accessible.
The reasons behind this are layered. Demand has grown as cities expand and more people move to urban areas. Smaller households also mean more homes are needed overall. But supply hasn’t kept up.
Building new housing is slower and more expensive than it used to be. Land costs have risen, construction materials are pricier, and planning procedures can take years. At the same time, years of very low interest rates before 2022 pushed property prices up sharply.
When borrowing costs later increased, mortgages became harder to afford – pushing more people into the rental market and driving rents higher.
What the EU is trying to change
The European Parliament has now adopted its first major report focused entirely on the housing crisis, calling for a more coordinated response across member states.
The EU cannot directly control housing markets – those decisions still sit with national governments – but it can influence how things evolve.
The plan centres on increasing housing supply, speeding up construction and unlocking more investment. There’s also a strong focus on cutting red tape, which is often blamed for slowing down new developments.
At the same time, the EU wants to channel more financial support into the sector. Billions of euros are already earmarked between 2021 and 2027 for housing-related projects, with additional funding expected in the coming years.
Part of that money will go into social housing and renovation projects. Another part targets energy efficiency – helping households reduce bills while improving living conditions.
There’s also a push to modernise construction, including faster building techniques and digital tools that could help deliver homes more quickly.
Spain: where the pressure is already visible
In Spain, the housing squeeze is already part of daily life – especially in cities like Madrid and Barcelona, as well as popular coastal areas.
Demand has been fuelled by a mix of local buyers, international investors and foreign residents. In some cases, that added competition has made it even harder to find affordable housing.
Short-term rentals in tourist hotspots have also reduced the number of homes available for long-term tenants. The effect is clear: fewer options, higher prices.
For many residents, adapting has become the only option. Flat-sharing is more common, rental periods are longer, and buying a home is increasingly delayed.
Social housing isn’t filling the gap either. Demand far exceeds supply, and access is often limited to the most vulnerable households.
A shared problem, but no single solution
One of the challenges for the EU is that housing policy remains largely national. Each country sets its own rules on rent, planning, taxation and housing models.
That means the European plan can guide and support – but not impose.
Local authorities are expected to play a key role, particularly when it comes to speeding up permits and identifying where new housing is most needed.
There’s also a growing understanding that housing affects more than just living standards. It shapes labour markets, mobility and economic growth.
What happens next for renters and buyers
The EU is preparing to take the next steps, including a dedicated housing summit and a broader alliance bringing together governments, cities and industry players.
Whether this leads to real change will depend on how quickly measures are implemented and how effectively countries respond.
For now, the situation remains tight. Across Europe – and particularly in Spain – demand continues to outpace supply, and prices remain high.
For many people, the search for a home is no longer just a step in life. It’s becoming one of the biggest challenges they face.
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