To fight against over-indebtedness, banks are called to be more vigilant to grant mortgage loans to individuals. The first effects are felt.
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It will be much more difficult to borrow to buy housing in 2020. | WEST-FRANCE ARCHIVES
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Those who obtained a mortgage in 2019 may have narrowly dropped it. In December, the High Council for Financial Stability (HCSF) which brings together, among others, the Banque de France and the Ministry of the Economy sounded the first alarm bells.
Why would it be more complicated in 2020?
The High Council asked the banks to avoid granting mortgage loans for more than 25 years and if the debt ratio of borrowers exceeded 33%.
On January 14, the Governor of the Banque de France, François Villeroy de Galhau reiterated the instructions applying to all the new loans deposited since this month of January, adding, it means that the drifts must stop and that the behaviors must change. And quick
. For now, these are just recommendations, but could turn into bonds.
What is the situation ?
Until now, it has never been easier for French people to borrow to buy housing due to historically low interest rates. Result, the sums loaned reach records: 258 billion euros in 2019
“, Says Frédéric Guyonnet, president of the National Banking and Credit Union. The production of new housing loans stood at 214 billion euros in 2018.
What consequences?
At least 100,000 households and up to 130,000 could be mechanically excluded by these measures, i.e. almost 10% of transactions carried out in 2019
, estimated in The Parisian, Michel Mouillard, economist at the head of the Household Credit Observatory. The Banque de France has refuted these figures. It is still too early to take stock, confirms a Rennes broker, we are still in the dark.
Another consequence of the low rates, some banks have decided to stop working with brokers. By removing these intermediaries, they keep a greater margin. Others have lowered the commission they pay them per negotiated file. In the coming months, we risk seeing brokerage establishments close
, explains Frédéric Guyonnet.
Do the banks follow the recommendations?
If we stick to the last publication of the Housing Credit Observatory, yes. Between December and January, the duration of loans has already gone on average from 232 months (19.3 years) to 227 months (18.9 years). A decrease fast
and unusual
at this time of year according to the Observatory.
Another indicator, the number of loans granted between November 2019 and January 2020 decreased by 6.7%. As of December, most credit institutions began to adjust their offers to the recommendations of the HCSF
, adds the Observatory.
Which households will find it more difficult to borrow in 2020?
Those without contribution or with credits in progress
, advises a broker. Borrowers who are already paying off a principal residence could also be penalized when they want to invest in rental
. Especially when their debt ratio is higher than 33%.
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