EDITORIAL
>> The Ministry of the Economy concludes this week the consultation launched in early October on the situation of mortgage lending in France. In the face of stiff competition from banks that are no longer making money, the government is worried about a risk of overheating the market. Our editorialist, Daniel Fortin, editor-in-chief at Les Echos, details the solutions studied by the State.
Is the mortgage market "threatened with overheating?" It is the fear of Bercy that has clearly decided to curb the ardor of banks to grant more loans to households
Yes, and it must be said that the numbers speak for themselves. Last August, household borrowing to buy a home again rose 6.5%. A trend that continues unabated since today the mortgage market is exploding. It reaches 1,000 billion euros in total. Banks are competing wildly to attract customers and they are granting increasingly generous terms. The most spectacular are the rates. They are lower and lower. We were at 1.7% on average in 2012, we are at 0.8% today. At this price the banks simply do not earn more money, so they put themselves at risk and this is what worries the government.
But how can we slow down credit without discouraging future owners?
So that's the difficulty, hence the extreme caution of Bercy who is still studying several solutions. For example, one could make the maximum income ceiling for the repayment of loans really binding. Beyond 33%, no more loans. Another way, limit the renegotiation of credits from other banks, which has become the favorite sport of the French. Finally, another even more radical measure would be a floor below which banks would no longer have the right to go down. So all this is under study, and the government should decide in the coming days but it faces a strong resistance from banks that have no desire to lose this great bait to customers that are real estate loans.