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Yet travel experts still warn of room shortages and high hotel rates as the supply of accommodations fails to keep up with rising demand.
It also noted sharp rental rises (of 33percentt) in the city in the last three years — the largest rent inflation in Spain — which it blamed on vacation tourists restricting the supply of accommodations.
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Despite its standing as the financial nerve center of the country, the city has always had a relatively modest supply of corporate accommodations.
The chancellor's announcement follows a recommendation in the Barker review of housing supply which looked at measures to increase the supply of rented accommodation and reduce volatility in the housing market.
Rents could rise due to a fall in the supply of rented accommodation and landlords looking to offset their stamp duty bill by raising their charges, while the supply of homes to buy could fall as investors who fund new developments are put off by the tax hike.
To make matters worse, rock-bottom interest rates have encouraged people to buy, rather than rent, their homes, thus reducing the supply of rented accommodation, which particularly hurts Latinos.Many Latinos still operate in the cash economy, which means that even the successful ones rarely pass the usual tests for mortgage risk.
Often they ask families, whose tenancies are coming to an end and who cannot find an affordable alternative, to stay where they are until they are literally turned out on the street – thus qualifying them for the limited supply of emergency accommodation.
"The supply of rental accommodation is increasing, while demand has softened slightly because of the improvement in first-time buyer numbers," said David Newnes of LSL.
The answer lies in the good ol' laws of supply and demand — unlike hotel rooms, the supply of sharing economy accommodations is elastic – the higher the price (or perceived price) goes, the more people put a place on the market.
"The change has potentially huge implications for the scarce supply of affordable rented accommodation," says Matt Hutchinson, director of Spareroom.
"There is no single solution to this problem," says Lewisham Council, which has an imaginative "pop up" housing scheme in Ladywell among its policies: "Homelessness here continues to rise whilst the supply of suitable affordable accommodation is reducing and the cost of housing across all tenures has never been higher".
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