The Spanish tourist crisis continues to heat up as holiday rentals have increased in a city loved by Brits despite protests around the country.

The number of tourist flats in Madrid has risen significantly in five months despite the increase in fines, which can reach £84,000.

Investors are opening more Tourist Use Homes (VUT) despite the halt in new licence grants and increased fines for hosting visitors without municipal permission. 

Currently, there are 17,490 tourist flats listed on Airbnb in Madrid, compared to 16,337 in May when Mayor Almeida announced the new regulations.

The first municipal warning allows business owners to cease renting to tourists without a fine. The second incurs a £25,000 fine, the third £50,000, and the fourth £84,000.

Urban Planning sources stated in July that they had imposed 176 fines of £25,000 each on VUTs operating without a municipal licence in Madrid, totalling £4.41 million in penalties.

Despite this, Airbnb listings continue to grow, especially concentrated in the Centro district, but now extending to many other districts within the central area and even the outskirts.

Madrid City Council attempted to deter new unlicensed VUTs by publishing the 1,000 that do have licences and encouraging citizens to report tourist apartments not on the list.

The Municipal Police recommend residents first go to police stations to file a complaint against any illegal tourist flat they have identified and then call 092 when tourists occupy it so a patrol can visit and document its illegal use.

The latest official figure from Urban Planning claims 12,494 flats are operating without a municipal licence in Madrid, compared to just 1,008 with approved licences. 

The City Council suspended new licences in April until a new regulation for their issuance was approved. The delegate for Urban Planning, Environment and Mobility, Borja Carabante, said he would present the new regulation by “late September or early October.”

This future regulation will reportedly halt converting shops into VUTs: Carabante explained that within the Centro district “no premises can be transformed into tourist use housing” because “we don’t want desertification of the district – for residents to remain there must be resources, amenities and commerce”. 

“We are more favourable towards concentrating uses in exclusive buildings; therefore, within exclusive buildings, there can be tourist use housing within Madrid city,” he said. 

But those profiting from tourist flats are trying to pressure Almeida to allow them to continue their activities. 

Madrid Aloja – the sector’s association in the capital – has called for a protest at Puerta del Sol demanding “fair regulation.” They claim to represent owners of over 5,000 VUTs in Madrid.

The association argues it is “unfair” to blame VUTs for the housing crisis “when they barely represent one percent of Madrid’s housing stock.” They also state that “16,000 homes will not solve this demand.”