rules

Should the rules for granting a mortgage be relaxed or not? A standoff is engaged on this subject at the top of the State. Faced with the deterioration of the market, the Ministry of the Economy asked the High Council for Financial Stability (HSCF), the sector monitoring body, on April 4 to ensure that the standards it has even established to protect households from over-indebtedness “do not become an obstacle to access to credit”.

In one year, the average interest rate over twenty years applied to buyers rose from 1% to 3%. And it will probably be 4% in the coming months. As a result, more and more households are finding it difficult to take out credit. « Lhe borrowing capacity has decreased by 20% in just two years”estimates Julie Bachet, managing director of broker Vousfinancer.

Credit production plummeting

According to the latest statistics from the Banque de France, published on 3rd April, the production of mortgages thus fell to 14.6 billion euros in February, ie a plunge of 40% in one year. In March, it should even drop to 13.7 billion euros, its lowest level since 2015.

But the Banque de France does not budge. In a note published on April 5, she warns of the risks of easing. He could “push a number of households into situations of over-indebtedness long duration and higher rates »argues the establishment chaired by François Villeroy de Galhau. Opening the floodgates of credit a little more would even be, according to him, « the worst time to do so, when the indebtedness of French households, at 66% of GDP, is already higher than the rest of the euro zone and all our big neighbours”.

Banks retain room for maneuver

It is therefore for the moment an end of inadmissibility to any reduction in the conditions for granting credit. In 2020, the HCSF limited the duration of real estate loans to twenty-five years (twenty-seven years in the event of work) and set a maximum debt ratio of 35% of income, even if banks can derogate from these rules. for 20% of their loan volumes. A margin of maneuver that they use quite little, underlines the Bank of France. It therefore evokes a “flexibility” which could be used to generate more loans.

Insufficient, according to professionals, who claim the possibility of making loans to thirty years for the youngest. “At the time, the HCSF’s decision was aimed at curbing the risks of overheating, as rates fell to an all-time low. But today, the context has completely changed and the regulations must be reviewed, as was done for the wear rate”judge Pierre Chapon, co-founder of the online broker Pretto.

In January, the Ministry of the Economy had agreed to review the method of calculating this rate of wear, which caps all the costs of a mortgage. Previously revised every quarter, it is now modified every month to take into account the rapid rise in rates, at the request of brokers.

Lack of housing

At Bercy, the change in tone is in any case notable and the line defended by the Banque de France seems increasingly isolated. “The government is realizing that the current housing crisis can get worse quickly if nothing is done”said an industry leader.

After years of euphoria, concern is growing among real estate professionals. “In the new, demand is collapsing”alarms the Federation of Real Estate Developers (FPI), citing sales to individuals down 26% in 2022, with a drop of 40% between October and December.

All social categories are concerned. During the last quarter of 2022, bulk sales to HLM organizations fell by a third, promoters recall. And the decline in housing starts, observed month after month, does not bode well for a rebound in the near future.

Prices remain high

The market for old properties is still resisting, with historically high levels of transactions: 1.2 million in 2021, probably around 1.1 million in 2022, according to the scores of the High Council of Notaries. The agency networks are counting on a decline in sales of between 5% and 10% over the year.

“We are witnessing two phenomena: a market downturn on the transaction with a price drop that is beginning to be felt in our announcements and a more marked wait-and-see attitude on the part of buyers”notes Philippe de Ligniville, deputy general manager of Bien’ici, the portal for major networks.

But it is not certain that the expected fall in prices will reach the same proportions as that, already observed, in borrowing budgets. As a result, households are resizing the project, agreeing to buy 10 to 15 m2 less. And others give up, especially younger ones, if they can’t get financial help from their family.