UK tourists rush to spend €500 to escape new Majorca law

UK tourists have been warned over spending 500 euros in Majorca to escape a new law. The European Union holiday hotspot is in crisis as locals take to renting out rooms to exploit high house prices, it has been reported this week.

Natalia Bueno, the former president of the API Association of Real Estate Agents, says there have always been homeowners who have rented out rooms to make ends meet. It is an increasing phenomenon, in Palma in particular, she told the Majorca Daily Bulletin.

She warned the renting out of rooms to exploit difficulties with accessing accommodation and the high prices to rent whole properties and says it means they can avoid certain obligations under the tenancy act that protect tenants.

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"It is totally unfair competition. They do in fact rent the entire property, but they resort to these tricks to circumvent the law," she said. The average price of renting rooms in Palma is 500 euros, according to the property website Idealista.

The average cost of renting an entire apartment is about 1,000 euros. With a three-bedroom property, owners can therefore receive 1,500 euros - 500 euros more. She said: "Owners can throw them out of their homes at any time."

"They are doing a lot of harm to real estate agencies and to citizens," she said. "The Balearic Islands have the highest demand for housing in the whole of Spain. The Mediterranean climate and its extraordinary natural environment make the islands a highly desirable place, both for local citizens and for foreigners with high purchasing power,” said María Martos from Fotocasa.

“However, the island territory is limited. Expansion of housing supply is therefore more difficult than in other regions. The imbalance between supply and demand is great. In addition there is a totally insufficient amount of social housing, and this pushes prices up."