Spain’s coalition government has agreed two Spanish housing decrees that would stop so-called “vulture funds” from buying homes until 2028 and extend protections against eviction until 2030. The deal was struck on Tuesday 29 September 2026, and for anyone with residential capital in Spain, from institutional funds to smaller private landlords, the direction of travel is now unmistakable.
The package, hammered out between the governing Socialist Party (PSOE) and its junior partner Sumar, would also regulate seasonal and room rentals, according to Europa Press. Rental contracts due to expire before 31 December 2028 would roll on for a further two years.
Ministers have requested an extraordinary session of Congress on Friday 2 October 2026 in a bid to secure immediate parliamentary approval for both decrees. The urgency is understandable: the government’s previous attempt at housing legislation failed to clear parliament in July.
What the Spanish housing decrees contain
Alongside the temporary ban on fund purchases, the coalition agreed that rental contracts should renew automatically. That measure will sit in the second decree.
Negotiations went to the wire. The Cabinet meeting started roughly an hour behind schedule as Sumar pressed for rules on room rentals and automatic contract extensions, two demands the Madrid tenants’ union had also championed.
The result reaches well beyond large institutional buyers. Seasonal lets and room rentals, formats often used by smaller landlords to lift yields or avoid longer tenancies, are now squarely in the regulatory frame.
An eviction that forced the government’s hand
The political trigger was the eviction of 87-year-old Maricarmen Abascal from the Madrid home where she had lived for 71 years. Police removed her from the property the week before the decrees were agreed.
Since then, hundreds of people have camped out in Madrid’s Puerta del Sol, demanding stronger protections for tenants.
Prime Minister Pedro Sanchez cited her case on Monday 28 September 2026 as he promised urgent action. “Patriotism is also preventing an 87-year-old woman, who has spent 70 years faithfully paying her rent in the same home, in the same neighborhood, from ending up on the street after a lifetime in that house,” he said.
Casting tenant protection as a matter of patriotism signals that this is no technocratic tweak. The government is staking serious political capital on housing, and landlords should price that in.
Why UK investors should pay attention
For British investors with Spanish holdings, the consequences are threefold. Tenancies on existing contracts could run for years longer than planned, regaining possession looks set to become harder until the end of the decade, and the pool of deep-pocketed buyers for larger residential portfolios shrinks while the fund ban lasts.
That last point matters for exit strategy. Investors who bought expecting to sell a block of flats to an institution should revisit their assumptions, particularly given how often Spain has been pitched as a yield play when comparing Spain with Portugal and Dubai for overseas property.
Much will hinge on the detail, including how the decrees define a vulture fund and how the seasonal rental rules are drafted. Until Congress has voted, the precise scope remains uncertain.
There is a familiar ring for landlords in England, where section 21 evictions have been abolished and tenancies moved onto a periodic footing under the Renters’ Rights Act. That shift has already forced owners to rethink everything from exit timing to how landlords evidence property condition under the Renters’ Rights Act.
Spain’s stance on funds does, however, stand in contrast to the UK, where institutional money is being courted rather than curbed, as the latest UK build to rent investment forecast shows.
For investors, the next test comes in Congress on 2 October 2026. If the decrees pass, Spanish residential property becomes a longer-hold, less flexible asset until at least 2028 and arguably 2030, so owners should check tenancy expiry dates against the 31 December 2028 cut-off, and prospective buyers should assume the regulatory tide is running firmly in tenants’ favour.
