Portugal tackles housing the opposite way to Spain: more protection for landlords

Luís Montezaino's Portuguese government is taking a reform to Parliament that reduces the non-payment period needed to terminate a lease from three months to two, allows up to three months' rent to be demanded upfront, and removes the two-month cap on security deposits. Spain passed two decrees focused on tenant protection.

## Portugal tightens the screws on tenants and loosens them on landlords

Luís Montezaino's Portuguese government is taking a proposal to Parliament that aims to restore landlords' confidence. The centrepiece is the non-payment period. It drops from three months to two to be able to terminate a lease. This is no small detail. In a market where landlords antiestéticar not getting paid, shortening that period reduces perceived risk. And perceived risk, like it or not, is what decides whether a flat goes on the market or stays empty.

The law also raises the guarantees that can be demanded upfront. Landlords will be able to require up to **three months' rent** in advance, compared with the current two. The two-rent cap on security deposits disappears. At the same time, the centre-right government wants to scrap the rent-increase caps introduced by the previous socialist government of **António Costa**. That said, the measure does not affect the annual updates of contracts already in force. The stated goal is for owners to regain confidence and put their flats back on the rental market.

The Minister of Infrastructure and Housing, **Miguel Pinto**, summed it up like this: they want to "restore confidence to the market to increase the housing supply". Protection for vulnerable families is, by design, left in the hands of the State. The plan includes an Emergency Fund for those who lose their home due to financial hardship. There is no eviction ban, as in Spain. Just a state safety net. The Portuguese opposition criticises the reform for making evictions easier. The government responds that evictions will only be carried out where there is a legal basis and that vulnerable families will not be left behind.

## The Dutch experience: banning investor purchases came at a price

The Netherlands offers an uncomfortable mirror for anyone who believes that restricting home purchases by investors makes renting cheaper. A "purchase protection" law was passed there allowing municipalities to ban the acquisition of homes for rent. In **Rotterdam**, a study by Marc Francke, Lianne Hans, Matthijs Korevaar and Sjoerd van Bekkum measured the outcome.

Investor purchases fell by **75%**. So far, the headline many would want. But the rental supply collapsed even further. Prices rose **4%** in the neighbourhoods where the restriction applied, compared with those left out. Access to housing became harder for lower-income families and for young people, who lacked the financial capacity to buy. The increase in homes for sale to individuals did not help much. Prices stayed practically flat. Neither was rent contained nor was buying made easier for those on tight budgets. The lesson: a measure that sounds good in a speech can end up closing more doors than it opens.

## Spain chooses the opposite path

Spain's Council of Ministers passed two royal decrees focused on the tenant. One includes a ban on investment funds buying housing, a measure that Sumar forced on the Ministry of Housing and Urban Agenda led by Isabel Rodríguez. The other provides for the indefinite extension of contracts and a ban on evicting vulnerable families. That point, evictions, was one of the main points of friction with Junts, which conditions its support for the text in Congress. Without its yes vote, the decree will not go through.

Data from Idealista sketch the playing field. Rental supply has fallen **61%** in Spain over the past five years. In major cities like **Barcelona**, where the Housing Law applies, the drop reaches **90%**. Fewer flats on the market, more competition for each one. The result is prices that keep climbing. The paradox is that many of the measures presented as solutions may be feeding the very problem they claim to fight.

## A European problem with diverging answers

In **Portugal**, rents rose **9.1% year-on-year** in the first quarter of the year. The neighbouring country already tried measures similar to Spain's. It restricted tourist flats. It gave the State the power to force empty homes to be rented out. Three years later, the government itself calls them ineffective. The Portuguese U-turn consists of stopping squeezing landlords and starting to protect them. It is a bet on supply in a continent where prices give no respite.

Whether it will work remains to be seen. Housing is a market with a long memory and policies take time to show their cards. What is clear is that Europe has stopped looking for a single recipe. Portugal bets on supply. Spain, on intervention. The results will tell which path was right. Or whether, as often happens in economics, neither was entirely. Before drawing hasty conclusions, it is worth remembering that the property market moves in cycles of years, not months. Legislative haste rarely goes hand in hand with lasting results. And when it comes to housing, as with any economic or legal decision, it is wise to consult specialised sources before taking sides.