2023-12-04 17:33:23
The lock on the maximum debt rate at 35% of income will not be lifted, at least not for today. Following a meeting of the High Financial Stability Council (HCSF), the Ministry of the Economy is not advancing this avenue to relax the granting of real estate loans but rather is putting forward other measures to try to revive real estate loan volumes. The objective of the HCSF is to restart the production of real estate loans, which has fallen below 10 billion euros per month since August, according to the Banque de France, unheard of for more than 7 years.
Among these measures, the emphasis is placed on energy renovation work, but not only that. All work is affected. As long as the transformation/renovation budget constitutes more than 10% of the total amount of the operation, the borrower can benefit from an extension of the credit duration from 25 years to 27 years. Until today, the work had to represent 25% of the total cost of the operation to justify such an extension of the credit duration. This reduction is therefore a boost to households who purchase a property requiring work. “Promoting renovation is a government priority. One in two homes is subject to renovation», Explains a source close to the HCSF. A mandatory measure which will be put in place in the coming days.
A re-examination of refused files
Another measure: set up a system for re-examining refused files. Thus, in the event of refusal to issue a real estate loan, the borrower can have access to a third party internally who will explain the reasons for the refusal or pave the way for a procedure to re-examine the file. According to our information, a maximum deadline will be imposed on banks to respond to borrowers’ requests. This will be set at the beginning of January. “The principle is not to offer credit to people who could not access it, otherwise we would encourage over-indebtedness, but to objectify situations of refusal and to facilitate relations between borrowers and lenders. It is a measure intended for a minority of cases which could prove solvency and which would not have had the loan because perhaps the agency at that moment T was at the maximum of its margin», Explains the source close to the HCSF.
The last measure concerns bridging credit, this system which allows an owner to buy a new property through debt while their current home has not yet been sold. This type of credit represents 8% of the distribution of real estate loans today. The aim is to exclude the interest on the bridging loan in the calculation of the borrower’s effort rate., that is to say the total amount of a borrower’s expenses compared to his income, which cannot exceed 35%. A measure which is not unconditional because the bridging loan is risky.
This system will only be possible if the bridging loan is granted for a maximum of 80% of the value of the property put up for sale. This measure will only be possible at the request of the credit applicant who must demonstrate solvency criteria. “Before today’s measure, if you were at the limit of the 35% effort rate and you requested a bridging loan, the latter only passed if the bridging loan was at zero interest. From now on, whatever the interest rates negotiated for the bridging loan, they will no longer be taken into account in the effort rate provided that the effort rate does not represent more than 80% of the value of the property.“. This system will be put in place in the coming days. Finally, banks will have more flexibility to deploy their quota of exceptions to the rules for granting credit, maintained at 20%. They may occasionally exceed this limit over a quarter if they manage to maintain the 20% limit by counting the following two quarters.
The French Banking Federation reacted to these measures without great enthusiasm. “The outlook for recovery will depend on the real estate purchasing power of households, depending in particular on prices per square meter; additional signals can make buyer sentiment more positive, in this regard we note the adjustments to the HCSF standards announced today. The banking profession reaffirms its mobilization for the healthy financing of the French economy, and its utility values on a daily basis, in times of crisis and in transition phases.“. For his part, Maël Bernier from Meilleur Taux speaks to the Figaro: “We didn’t overturn the table. It is a shame that the only effective measure: freezing HCSF measures, was not granted. It is hypocritical to say that banks do not want to lend when they have reduced the distribution of credits because of the HCSF standards.»
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