The hosts provided us with everything we could have needed. The place was clean, there were clean sheets, towels and also toilet paper, shampoo and shower gel. The kitchen is also fully equipped in case someone wants to cook.
The neighbourhood is fantastic! It is in central Madrid, very close to numerous cool bars and restaurants.
Just as a note to people that have never been to Madrid, the city (at least the most touristic parts between the palace and the Retiro park) are all reasonably walkable. Furthermore, the flat is very close to Puerta del Sol, literally the centre of Madrid and apparently the centre of Spain as well...! :)
Generally highly recommendable place and I would definitely visit again in the future.