SPAIN’S crisis-ridden housing market is coming into the crosshairs of major British investors seeking to profit from so-called affordable housing schemes.
UK-based Octopus Capital says Spain’s chronic shortage of low-cost homes has created a rare opportunity for long-term, low-risk returns.
The firm, which last year opened an office in Madrid, has already raised €400 million to deploy into Spanish affordable housing projects, according to its latest report.
READ MORE: Spain’s housing crisis will continue for years because ‘house building is just not profitable’
Octopus argues that Spain’s affordability crunch is now so severe that institutional investment has become both financially attractive and politically supported.
The company points to a dramatic shift away from home ownership among younger Spaniards as a key indicator of demand.
Less than two-thirds of under-35s now own their homes, down from 69% a decade ago, pushing a growing share of the population into the rental market.
For investors, Octopus says this signals a long-term need for stable, professionally managed rental accommodation.
Spain’s overall stock of affordable housing is also among the lowest in Europe.
Only 2.5% of all homes in the country fall into the social or affordable housing category.
In France and Germany the figure is closer to 10%, creating what Octopus describes as a massive supply gap.
The European Commission is, meanwhile, preparing a new European Affordable Housing Plan, which the firm says offers political backing for large-scale investment.
Most schemes are delivered through public-private partnerships and include rent caps set by local authorities, with prices typically linked to inflation.
Octopus claims this gives investors what it calls ‘downside protection’, meaning projects are less exposed to sharp market swings.
Analysts say the influx of British capital is likely to focus on municipalities with strong rental demand, including coastal provinces where expats and tourists already compete with locals for accommodation.
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