Spain rental investors drop to 77% — Fotocasa 2025 report
According to Fotocasa’s 2025 report, investors buying homes to rent fell from 84% to 77% as rent caps limit returns. Long-term lets rise while mortgage-financing motives grow.
The share of property buyers in Spain who say they purchase homes to rent them out has slipped to 77%, seven percentage points lower than a year earlier, according to Fotocasa’s report “The investor segment in the real estate market in 2025.” The decline signals a recalibration among small investors as regulation and cheaper credit reshape motivations.
Fotocasa points to the Reference Index of Housing Leases (IRAV) — the law that sets maximum ceilings for rental prices — as a key factor limiting rental profitability. María Matos, spokeswoman for Fotocasa, warned that the price cap is discouraging owners from putting properties on the rental market. “This restriction discourages owners from renting out their homes; up to 43% could withdraw their property from the rental market when the current contract ends,” Matos said, a move that would further squeeze supply.
Shifts in investor preferences were also evident in the type of rentals sought. Long-term leases remain the dominant choice, preferred by 61% of investors. By contrast, short-stay and holiday lets have lost steam, dropping to 16% of investor projects from 20% a year earlier — a sign that tourist rental strategies are less attractive under the current market and regulatory conditions.
Why investors buy to let is changing too. Profitability remains the top reason—68% of investors cite it—but this share has fallen by four points compared with the previous year. Analysts link the reduction to the relaxation of interest rates: cheaper mortgage credit reduces the immediate need to rely on rental returns for positive cash flow.
At the same time, using rental income to help pay mortgages is a growing motive. The proportion of buyers who explicitly purchase to rent in order to finance mortgage payments rose to 37%, up from 26% the year before. That increase suggests more investors are treating rental income as a means to service debt rather than as pure yield-seeking activity.
Market implications
Fotocasa’s data points to two competing dynamics: regulatory limits on rents are discouraging some owners from offering properties to tenants, while lower borrowing costs are encouraging new purchases — sometimes specifically to cover mortgage obligations. If a large share of landlords follows through on withdrawing units from the market, renters could face tighter supply and upward pressure on prices, though the interplay with mortgage-driven purchases may offset some of that reduction in availability.
What to watch
• Whether the predicted 43% withdrawal materializes as contracts expire.
• How policymakers respond to investor concerns about IRAV and rental ceilings.
• The balance between new buy-to-let purchases intended to cover mortgages and the ongoing reduction in profitability-driven investment.
