The first evidence of how landlords are reacting to Spain’s controversial new housing decrees suggests that thousands of homes are already being withdrawn from the long-term rental market, making the housing shortage worse rather than better.

According to a survey by the National Federation of Estate Agent Associations (FAI), almost 6,000 rental transactions have been disrupted in just ten days following the government’s emergency housing decrees, which were rejected by Parliament and then reintroduced ahead of the snap general election on 29 November.

The FAI surveyed more than 600 estate agencies in Spain’s main cities and provincial capitals, finding that 88.9% had experienced disruption to their rental business as a result of the regulatory changes.

The most striking finding is that 4,235 properties have been withdrawn from or diverted away from the conventional long-term rental market. Of these, 2,067 were withdrawn altogether, 1,224 switched to the sales market, and 944 redirected towards seasonal or room rentals. Another 1,523 rental contracts have been put on hold.

These are figures reported by the agencies surveyed, not a national estimate, and the survey does not establish how many properties might eventually return to the rental market. Nevertheless, the scale and speed of the reaction are striking.

Landlords vote with their feet

The FAI reports that 78.1% of agencies have seen landlords withdraw properties from long-term letting, whilst 72.4% have experienced rental contracts being delayed or frozen. Based on these early findings, the federation warns that rental transactions could fall by 25% to 30% in the coming weeks.

The problem is particularly acute for small landlords, who account for much of Spain’s private rental supply and are especially sensitive to uncertainty over rent controls, eviction protections and their ability to recover possession.

FAI president José María Alfaro acknowledges the public frustration over the housing crisis but argues that the government’s response is having serious unintended consequences. He also criticises the decision to push the decrees through the Permanent Deputation whilst Parliament is dissolved, warning against hurried legislation in an already strained market.

The predictable consequences of more intervention

These findings are consistent with the concerns I raised in my previous articles about the decrees and the government’s decision to make housing the central battleground of the coming election.

Spain desperately needs more rental housing, yet the government’s approach risks encouraging existing landlords to withdraw properties whilst deterring new investment. Sitting tenants may benefit from greater protection, but those searching for somewhere to live face an increasingly difficult market with fewer choices.

The FAI is calling for an emergency national housing plan involving political parties, regional governments and the property sector, regardless of who wins the election. That would be a more constructive approach than using housing as a political weapon.

The survey is an early warning rather than definitive proof of a lasting collapse in rental supply. But it illustrates how quickly landlords can react when the rules become unpredictable. With the election still six weeks away and the future of the decrees uncertain, there is little reason to expect confidence to recover immediately.

Spain needs policies that encourage more homes onto the market, not measures that persuade their owners to take them off it.