Lanzarote loses more than 1,000 holiday rentals as new law fails to ease housing crisis

Lanzarote has lost over 1,000 holiday rentals in the last year, according to the Canarian Institute of Statistics. But the Canarian law that caused the decrease has so far failed to alleviate the acute housing crisis on the island.

The island had 7,809 VVs (viviendas vacacionales/ registered holiday rental properties) at the end of July 2025, but that figure has fallen to 6,803 at the end of the same month this year. The decrease of 12.8% is lower than the average for the Canary Islands, which is 15%, but still constitutes a significant drop.

As a result, the income from these properties has fallen by over €4 million to €21.4 million.

In the resorts, Teguise lost 162 VVs (10%), Tías lost 274 VVs (10%), and Yaiza was hardest hit with the loss of 355 rental properties (15%).

The results clearly show the effect of the Canarian Law on Rental Properties, which came into effect in December last year and introduced strict new requirements for rental owners.

However, one of the main aims of this controversial law – freeing up rental properties for longer-term residential lets in order to bring rents down and ease the housing crisis on the islands – has not taken place. If anything, it has reduced the number of accessible rentals on Lanzarote.

In a recent report by El Diario de Lanzarote, representatives of the island’s real estate sector claimed that very few owners of VVs have moved into the residential market but have instead simply removed their properties from the market altogether.

They claim that the problem was never the number of holiday rentals, it is the legal insecurity that Spanish law provides for landlords, which removes control of properties for a minimum of eight years.

This has also affected property sales, which have fallen by 70% according to one professional, who says that buyers are increasingly reluctant to purchase properties as investments.

Other estate agents commented that the owners who have converted their properties to residential lets have failed to adjust rents downwards, leaving them out of reach for most islanders.