Rents soar as bid to attract foreign money backfires

Government incentives and deregulation have brought digital nomads, Airbnbs and 'golden visas' - but steep housing costs for locals

- Sam Jones

By 7.30 on a summer night, Lisbon's beautiful streets are beginning to fill with visitors taking selfies, trailing from bar to bar and wrestling with the conundrum of where to have dinner.

Margarida Custódio, who sits at home with her three-year-old daughter, Pilar, has more pressing matters on her mind. Like so many people in Portugal, where rental prices make a mockery of the low salaries, Custódio lives through a monthly agony when it comes to covering the costs of her flat. Despite a good job in human resources, she earns €930 (£795) a month after tax-of which €700 goes on rent.

"Here, you spend almost 90% of your salary on rent each month," she said. "Whatever you have left over goes on gas, water, electricity and food. It's like living on the edge."

Meanwhile, in the Bairro da Jamaica, a rundown housing development in the city of Seixal, which lies on the other side of the 25 de Abril Bridge that is linked to Lisbon in the north, Lizandro Batista de Sousa Pontes and his children are in even more perilous straits.

The once abandoned housing estate that has been home to the 47-year-old bricklayer's family since he came to Portugal from the African island nation of São Tomé and Príncipe in the late 1990s is scheduled for demolition.

The local council says the blocks need to come down as they were never finished before they were occupied and lack "habitable conditions".

Although Seixal council has so far rehoused 545 people from 185 families, De Sousa Pontes is hanging on and has brought a legal challenge to the demolition of his block, arguing that he and his children are better off there than having to squeeze into his sister's two-bedroom flat, which is already home to five people.