Spanish government commits to controlling rental prices

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MADRID (Reuters) - Spain will regulate rental prices in areas where the demand for homes outstrips those on offer, Treasury Ministry Maria Jesus Montero said on Tuesday, the latest twist in a drawn-out internal spat between coalition partners Unidas Podemos and the Socialists.

"The regulatory package contemplates different parts (of the real estate market) which have to be regulated, among which is the fight against exploitative rental prices," Montero told reporters on Tuesday.

Spain's leftwing coalition government made affordable housing a policy priority, although the economic crisis wrought by the coronavirus pandemic has complicated its ambitions. The hard-left Podemos advocates price caps without exceptions.

With social housing representing less than 2% of all homes according to the OECD, Spain lags far behind European peers such as Britain, France or Italy, where subsidised housing represents 17%, 14% and 4%, respectively, of each country's stock of homes.

"The debate centres around which instrument will best allow us to provide judicial security and respect citizen's rights, both the right to housing as a social function, and the right to private property," Montero added.

But landlord associations across the country have decried the move, saying the climate of legal uncertainty is deterring potential investors and individual landlords from renting their properties, reducing rental stock as a result.

"We think it's more effective to promote than to impose, and are working on several means of getting more homes onto the market at accessible prices... like tax incentives," Transport Minister Jose Luis Abalos declared on Monday in an apparent attempt to appease concerns about direct caps on rental prices.

(Reporting by Clara-Laeila Laudette; editing by Andrei Khalip and Dan Grebler)

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