The rental market in Portugal continues to face difficulties, with a lack of supply being one of the main problems which could, according to a report by Idealista, become worse.

In the recent barometer prepared by the Lisbon Owners Association (ALP), 72.7 percent of respondents say they do not trust the evolution of the market for rentals, with many preferring to leave their properties vacant while they “wait for better stability conditions” or to even sell their real estate.

According to the ALP, the biggest fears of landlords for the new political cycle are the increase in the tax burden (73.5 percent), the increase in delays in justice (38.5 percent) and a return to the freezing of rents.

Although the rent freeze has not been extended due to the State Budget for 2022 (OE2022), the document reveals that "the overwhelming majority of landlords will avoid renting", with 89.2 percent confirming that they have not intentions to place vacant properties on the market. Of these, 41.4 percent will choose to put them up for sale, and almost a third of respondents (30 percent) prefer to keep their properties vacant while “waiting for better conditions of stability”.

Rent arrears

For the first time since it was created, the Barometer has registered a small drop in the non-payment of rents, with 33.2 percent of respondents saying they have rent arrears.

In the three previous editions, the percentage of non-compliance reached 40 percent, having reached a peak of 60 percent last year, in October 2020, still in the aftermath of legislation approved in the first wave of the Covid-19 pandemic, “which led to a wave of widespread defaults”, according to the association. Of these, the largest share, 35.6 percent, accumulates two to three months of income in arrears. A significant portion (28 percent) suffered delays in the payment of rent on their properties for more than six months.

“Frozen” lease contracts prior to 1990 are still borne by the overwhelming majority of owners consulted (61.4 percent) by ALP. The affordable rental programs of the Government and municipalities convinced only 2.3 percent of the sample of respondents, with 95 percent of landowners saying they did not trust these programmes, while almost half of respondents (44.5 percent) expressed fear that the terms of contractual agreements and tax benefits granted may be unilaterally changed.