France is also capping rents: they won’t be able to rise more than 3.5% next year.

In the night from Wednesday to Thursday, the French representatives approved the bill of the president’s party, Emmanuel Macronwhich plans to limit rent growth to 3.5% for the second year in a row to curb the effects of inflation.

The text that is processed in the Parliament according to the accelerated procedure will serve to extend the effects of the so-called of the law on purchasing power from August 2022, which expires on July 1. Two articles of that norm set an upper limit of 3.5% on the annual increase in rental income for housing. This upper limit is even lower, at 2.5%, in the overseas regions and can be modulated by an additional 1.5% in Corsica.

Deputy Thomas Cazenave, the rapporteur of the bill now under discussion, which was approved by a vote of 259 to 93, insisted that without this cap on rents living place which had to be revalued in the first quarter would increase by 6.26%, taking into account the index that serves as a reference.

If the bill completes its parliamentary process — it will now continue its journey through the Senate — annual rent revaluations must not exceed 3.5% until the second half of 2024.

The French measure is very similar to the one applied in Spain, where this year the annual rent increase is limited by law to 2% (unless the owner and tenant freely agree to a higher increase). According to the recently approved housing lawthis upper limit will be 3% in 2024. From 2025, the regulation foresees the implementation of a new reference index that will be applied for the review of these rental contracts and that will replace CPI. The intention is to use this indicator to exclude the most volatile elements that affect inflation, so that the price of housing does not skyrocket in contexts such as the current one.

Year-on-year inflation in France slowed down in May, thanks to the containment of energy, food, industrial goods and services prices, and remained at 5.1%, eight tenths less than in April.