State interventionism: the perfect recipe for destroying the rental market

We have been warning about this for some time, and the figures for the end of 2025 only serve to confirm the disaster: meddling in the property market has disastrous consequences. The government’s obsession with controlling prices and declaring ‘high-demand areas’ has led to exactly what anyone with common sense could have predicted: a historic collapse in the supply of long-term rental properties.

It is no coincidence that the cities where landlords have been most heavily targeted are precisely those with the fewest flats available today. Pamplona tops this absurd ranking with a 26% drop, closely followed by A Coruña (-21%) and Lleida (-20%). In key cities such as Barcelona and San Sebastián, supply has fallen by 15%. It’s simple maths: the more intervention, the fewer homes for families seeking a stable home.

The forced shift to seasonal rentals

When you stifle conventional rentals with price caps and legal uncertainty, the market seeks a way out to survive. The figures are devastating: whilst traditional rentals are collapsing in regulated areas, seasonal rentals have soared by 36% across Spain. They now account for 29% of the total market.

In Barcelona, the situation is surreal: 64% of advertised properties are now seasonal rentals. Girona (49%) and San Sebastián (46%) follow. This is not a free choice by landlords; it is a desperate response to a government that has turned long-term letting into a high-risk activity. Ultimately, those most affected are citizens who need a five- or seven-year lease and find themselves in a market dominated by short-term stays because the state has destroyed confidence.

Freedom vs. Control: the data does not lie

The comparison is damning for advocates of price controls. In markets where supply and demand have been allowed to breathe, the situation is radically different. Madrid has seen its supply grow by 5%, Valencia by 6% and Seville by 13%. Even in cities such as Cáceres or Ávila, increases exceed 50%.

The conclusion is clear: supply only recovers where there is no intervention. Markets with price caps continue to systematically destroy stock. As long as the Government remains determined to treat landlords as the enemy and to ignore the basic laws of economics, access to housing will remain an ordeal. You do not solve a shortage problem by prohibiting price rises; you solve it by providing security and encouraging more flats to come onto the market. Everything else is propaganda that the tenant ends up paying for.

Insecurity and legal negligence: the root of it all

But the root of all this is actually what the authorities are unable or unwilling to see. The insecurity to which a landlord is exposed every time they sign a tenancy agreement. The balance, completely tilted in favour of the tenant. The courts, incapable of providing a reasonably swift response to issues of squatting, non-payment… They make the outlook increasingly bleak for those who need a home and cannot access one, with mortgages becoming ever more out of reach.

In short, the government is adopting an ostrich strategy, trying to get landlords to solve the housing problem by sacrificing their properties and their finances, whilst the government buries its head in the sand, both to appease its anti-establishment allies and those so-called ‘vulnerable’ tenants—most of whom are not actually vulnerable—and to wait for whatever is happening to sort itself out, as if by magic.