Rental Costs Push Two Million into 'Hidden Poverty' in Spain: "My Parents Had Bought a Home by This Age"

The high cost of rent in Spain has created a "hidden poverty" affecting nearly two million people, according to a Fedea study. Those living by renting are especially vulnerable to falling below the poverty line once housing expenditure is factored in.

The price of rentals in Spain has become a trap for many, pushing nearly two million people into a state of "hidden poverty." This means that although their initial income does not classify them as poor, the monthly payment required to have a roof over their heads ultimately converts them into such a situation. This is a phenomenon that is reshaping the country's social landscape, especially for those renting.

## Housing: An Unattainable Luxury

The reality for many young Spaniards is vastly different from that of their parents' generation. While previous generations could aspire to owning a home at a similar age, today accessing housing has become an odyssey. One example is **Lucía**, 25, who lives in **Madrid**. Despite having a salary that is "not bad" as a community manager, the rent of **1,300 euros** per month she shares with her partner represents a considerable strain. Her portion, close to **650 euros**, accounts for **41.5%** of her net income over 14 payments, far exceeding the threshold recommended by experts. "Salaries are low and rents are very high," she laments, recalling that before, she could only afford a lower rent because her landlady was her aunt and charged below market rate.

This situation is aggravated by the fact that an increasing number of Spaniards are opting for rentals. They currently account for **17.1%** of the population, and prices continue to climb. The study "The Cost of Housing and Hidden Poverty in Spain: 2014-2025," published by the **Foundation for Applied Economic Studies (Fedea)**, reveals that one in four tenants who are not initially poor become so once they pay rent.

If conventional poverty affects **32.8%** of those living by renting at market price, this figure jumps to **49.9%** after discounting the cost of housing.

## Impact on Disposable Income

The Fedea analysis presents compelling data on how rent payments diminish household economic capacity. If conventional poverty, measured by disposable income, is considered, the rate in Spain stands at **19.5%**. However, when discounting the cost of accessing housing, whether rented or owned, this rate rises to **23.5%**. This translates to approximately **1.95 million people** in a state of "hidden poverty." This figure has increased from the **1.71 million** recorded in **2014**.

Within this group, there are about **220,000 people** who not only cross the poverty line but fall below the severe threshold after facing housing expenses, which is set at **40%** of median income. This phenomenon is a direct consequence of the escalating prices experienced by the real estate market in recent years, especially since the pandemic. Rents have reached historical highs, while sales prices approach the levels of the **2008** bubble, all against a backdrop of wages growing much slower.

## Youth and Migrants: The Most Vulnerable

Alongside tenants, young people and migrants are the groups facing greater vulnerability when dealing with housing costs. Those residing in areas with tight residential markets are also particularly affected. **Martín**, 27, a psychologist with stable employment in **Madrid**, shares this concern. His rent of **660 euros** per month, plus expenses, accounts for **32%** of his salary. The situation becomes even more complicated when his contract ends at the end of the year, as his landlord plans to raise the rent to at least **700 euros** plus expenses, despite sharing the apartment with three other people.

The difficulty in accessing decent housing directly affects young people's emotional well-being. According to the Housing Strain Index published by **EAE Business School**, two out of three young people, especially tenants, acknowledge that the cost of housing negatively impacts their mood. This forces them to cut back on leisure and social activities, which are fundamental to their quality of life. "You reach a point where you have to choose. I'm not talking about total isolation, but scaling back on other plans," explains Martín.

The disparity between rent increases and wage growth is alarming. A **2025** study by **Infojobs** and **Fotocasa** indicated that rent prices had risen almost **7%**, while wages only increased by **1%**. This gap creates a feeling of regression and makes future planning extremely difficult. "It is a societal issue that affects all of us, and there should be more regulation," concludes Martín, reflecting a widespread demand for policies addressing this problem.

The Fedea study also points to the opposite effect: if one considers the economic benefit of those who enjoy housing without paying market rent, around **3.38 million people** who appear poor according to their monetary income would no longer be.

This effect is mainly concentrated among older owners without a mortgage, highlighting the duality of the real estate market and its differentiated impact on the population.