In the Baleares, an average household now spends 57 per cent of its income just to cover their first year’s mortgage repayments, and Brussels has handed Spanish town halls a new legal weapon to act. Second-home owners and Airbnb hosts in the priciest regions could feel it first.

A common EU test for “housing stress”

The European Commission put forward its Affordable Housing Act on Wednesday September 9, alongside a companion recommendation on boosting housing supply. Commission President Ursula von der Leyen said the goal was to give “clarity and support to local authorities and communities, anchored in local realities.”

The Act doesn’t force any Spanish town hall to do anything, but it lays out a common EU-wide method for deciding when an area is officially under “housing stress”, and gives authorities that meet the test firmer legal ground to restrict short-term lets or non-primary home ownership without being dragged through years of costly litigation.

To qualify, an area’s average home now needs to cost at least eight years of the average person’s disposable income, that ratio must have been rising over the past decade, and the outlook must show little sign of easing over the next three years. If the ratio hits 10 years of the average person’s disposable income, the 10-year rise requirement drops away entirely.

Where Spain’s numbers already look close to a match

Spain’s national price-to-income ratio stood at around 7.5 years in mid-2026, according to the Bank of Spain, just under the EU’s trigger point. But that national average hides some stark regional gaps.

Fourteen Spanish provinces already sit above the 35 per cent mortgage-effort level the Bank of Spain treats as a risk threshold, including Baleares, Málaga, Barcelona, Alicante, Cádiz, Santa Cruz de Tenerife and Madrid. The Baleares is the most extreme case, where a typical household would need to hand over 57 per cent of its disposable income just for the first year’s mortgage repayments.

What could actually be restricted, and what’s protected 

Two things could face limits in a designated stress zone: short-term letting of a property that isn’t someone’s main home, and the purchase or use of second homes and other non-primary residential property, through tools including quantitative caps, authorisation schemes or owner-occupation rules. 

Before any of that can happen though, a council has to show three years of solid evidence that the activity has genuinely damaged local affordability. Two protections apply everywhere, without exception: letting out your own primary residence can never be restricted under the Act, and nobody who already owns a property before a new measure takes effect can be caught by it retroactively.

Spain already runs its own version of this 

Spain has had its own system since 2023, allowing regions to declare zonas tensionadas (strained zones) where rent cannot exceed a previous tenancy’s price. It uses a different test entirely, based on rents or mortgages costing above 30 per cent of local incomes, or price rises running three percentage points ahead of regional inflation. Cataluña has been the most active, with more than 40 municipalities declared, most of them around Barcelona.

Spain will now be running two parallel systems that measure housing stress in different ways, and an area could plausibly qualify under one and not the other. Housing Minister Isabel Rodríguez has been pushing Brussels for exactly this kind of legal backing, arguing town halls need tools to regulate without the constant fear of being sued.

Barcelona’s Airbnb battle shows why councils wanted this

That fear felt by town halls across Spain isn’t hypothetical. Airbnb is still appealing a €64 million fine Spain imposed for advertising unlicensed properties, and Barcelona’s plan to phase out its roughly 10,000 licensed tourist flats by 2028 only survived after Spain’s Constitutional Court upheld it last year. The Affordable Housing Act will not fast-track Barcelona’s ban, but it should give the next town hall trying something similar a far shorter route through the courts. 

The proposal now goes to the European Parliament and EU governments, who could amend it significantly before it becomes law, likely not before 2027. For now, existing owners and anyone letting out their own home face no changes to the current rules, though anyone weighing up a second property in Spain’s most stretched coastal towns now have more reason to watch what their local council does next.

Imagine having enough money coming into your bank account to pay the rent, but still being unable to find a landlord willing to rent you a home. That is the increasingly frustrating reality for renters across Spain, where soaring demand, limited supply and tougher financial checks are making it harder to get through the front door. For some people, having enough money for the monthly rent is no longer enough.

Juan José Jiménez Montoro and Isabel Otero Martínez have now found themselves on the most extreme end of that problem, sleeping in their car in Arteixo, Galicia, after their 12-year tenancy ended. “Tonight we sleep in the car again, we didn’t receive any rental offer,” Juan José explains

Rental reality

According to La Voz de Galicia, the couple currently receive €2,345 a month between them, but say they have been unable to secure another property because they cannot provide the permanent employment contracts and payslips being demanded by landlords and agencies. Their experience exposes a growing problem in Spain’s rental market: there may be homes available, and there may be people able to pay, but getting those two things together is becoming increasingly difficult.

For someone searching for a home in Spain, seeing an affordable property advertised does not necessarily mean it is within reach. Landlords can request proof of income and financial stability, while many use rental-payment insurance to protect themselves against unpaid rent.

Insurers assess prospective tenants before providing cover, with employment status, income and other financial circumstances among the factors that can affect eligibility. That creates an obvious obstacle for people whose income comes from unemployment benefits, pensions, temporary work or other sources that may be considered less secure than a permanent salary. It is precisely the problem facing Juan José and Isabel.

Spain has too few homes for the people looking

Juan José receives €1,125 a month in unemployment benefit and Isabel receives a €1,220 widow’s pension. On paper, their combined income gives them money to put towards rent. But without permanent employment, they say they have struggled to satisfy the requirements attached to available properties. And they are far from the only renters facing a market where competition is increasingly fierce.

Spain’s housing shortage has become one of the country’s most pressing economic and social problems. The government’s new State Housing Plan for 2026-2030 acknowledges the heavy burden housing costs place on households. According to the plan, 26.8 per cent of Spanish households renting at market prices were spending more than 40 per cent of their income on rent in 2025, compared with around 19 per cent across the European Union.  At the same time, the supply of long-term rental properties remains under pressure.

The strongest applicants win

Recent analysis based on Idealista data found that rental prices in Spain had risen by more than 30 per cent over the three years following the introduction of the 2023 Housing Law, while rental supply fell by around 30 per cent. The average property advertised for rent was receiving 41 enquiries, more than twice the level recorded in 2023. That imbalance changes the position of the renter.

When dozens of people are competing for the same property, a landlord can choose the applicant with the strongest employment history, highest income or most straightforward financial profile. Someone who can comfortably afford the advertised rent can still lose out to another applicant considered less risky.

The squeeze is affecting ordinary households

The pressure is not limited to people on very low incomes. Young workers trying to leave the family home, families looking for larger properties, pensioners, self-employed workers and people whose employment has become unstable can all find themselves competing in the same market. Spain’s new housing plan notes that wages have failed to keep pace with housing costs and that difficulties accessing rental or owned accommodation are contributing to more severe forms of housing exclusion, including homelessness. 

In major cities and other high-demand areas, the choice can become particularly stark: accept a property that is smaller, more expensive or further away, or continue searching while someone else takes it. The shortage of suitable homes also helps explain why the middle of the market can feel particularly difficult. In Barcelona, for example, recent market analysis found that supply was increasingly concentrated in very small flats and larger, higher-priced properties, while the medium-sized homes most renters want were disappearing. 

The window is closing

Juan José and Isabel are now racing against another problem: their income is about to fall. Isabel’s widow’s pension is due to drop from €1,220 to €705 in November, while Juan José’s unemployment benefit is expected to end in December, after which he anticipates receiving a subsidy of around €500.

They are therefore trying to find a home while they still have their higher combined income, instead, they are sleeping in their car. They have applied for social housing and sought help from the Concello de Arteixo, but are still waiting for a permanent solution. Their daughter has also had to stay elsewhere temporarily.

Just a place to live

Isabel has said she is not looking for a free home. She wants somewhere modest that the couple can afford. “I don’t want anything for free,” she said. “A ground-floor flat, a bed, I don’t ask for anything else.” Their circumstances may be  severe, but the barrier they have encountered is increasingly familiar to renters around Spain. In Malaga, for example, people have resorted to living in camper vans due to being unable to meet rental prices

The challenge is no longer simply finding a property with a rent you can afford. It is finding one where your income, employment status and financial circumstances are acceptable to the person deciding who gets to live there. For people who fail that test, the search for a home can continue long after they have run out of places to look.