THE Spanish government has given the green light to a new housing benefit to encourage young people to cut the apron strings and move out from their parents’ home.
This comes in the form of a €250 a month bonus to put towards the rent of an apartment by those under the age of 35 who have a salary below €24,318.
The measure was approved in a cabinet meeting on Tuesday and announced by Housing Minister Raquel Sanchez.
The subsidy “is an important element to stop housing (prices) being such a hurdle for youth emancipation,” she said.
Spain’s government introduced the measure in a bid to help the younger generation find their own feet and live independently.
Recent studies reveal that Spain has one of the highest shares of young people living with their parents in Europe, as many as 55% of 25-29 year-olds in 2020, according to the latest official data, up by 6.5 percentage points since 2013.
Spain also has one of the highest youth unemployment rates with a nationwide average of 29% of people under 25 registered as jobless.
Even those that do have jobs, their salaries are notoriously low, with the latest data from the National Statistic Agency (INE) showing an average monthly wage of €1,207 among the under 35s.
But the measure has already been widely criticised.
One of the conditions of the state aid is that it can only go towards apartments that rent for a maximum of €600 for the entire property or up to €300 for just one room – although this upper limit may be raised in regions where property prices are significantly higher such as Madrid and Barcelona.
Industry insiders warned that there is a dearth of rental properties that will fall below this threshold, most notably in the big cities which is where the rental aid is most needed.
A study carried out by property portal Fotocasa revealed only 1.4% of housing in Madrid fell below the €600 threshold, a share that rises to 29% if the cap is raised to €900. Meanwhile in Barcelona, cheaper rental properties are even more scarce with just 0.8% below a monthly €600 and just 18€ available for less than €900 a month.
Fears are that the subsidy would likely result in rental prices for small apartments being driven up as demand increases.
“Prior experiences have shown that the main consequence is a direct price increase,” Francisco Inareta from property portal Idealista told Reuters.The government estimates that the benefit could help 70,000 people in total, far below the 60% of the 7 million aged between 18 and 35 who said in a recent survey that they needed to rent an apartment in order to leave home.
READ MORE:
- KEEPING CONTROL: Spain’s government plans restrictions on rent rises
- Pedro Sanchez says Spain’s creating ‘quality jobs’ as unemployment tumbles in 17-year record fall
- Spain’s youth unemployment highest in Europe according to Eurostat study
Click here to read more Property News from The Olive Press.
