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20 minutes

  • The High Financial Stability Council (HCSF), chaired by the Minister of the Economy, imposed constraints on banks in December 2019 on the conditions for granting real estate loans.

  • Since then, the Covid crisis has passed through there, and with it a global economic crisis.

  • Despite persistently low interest rates for over a year, it is increasingly difficult to obtain credit for housing.

    Borrowers should not exceed 33% debt ratio, have a contribution of at least 10% of the purchase price, and if possible additional savings.

If real estate remains a safe haven, places are more and more expensive.

Difficult, in fact, to be able to take out a mortgage today.

In any case, more difficult than yesterday, to believe the professionals of the sector interviewed by

20 Minutes

.

Blame it on the coronavirus and the resulting major economic crisis?

Only in part.

Because to understand why banks are now so cautious about loan applications, we have to go back.

Last December, before the arrival of the famous virus.

At the time, already, the establishments had pressed on the brake pedal, according to the directives of the High Council of financial stability (HCSF), placed under the direction of the Minister of the Economy.

In question: interest rates flush with the daisies for over a year and an ever longer borrowing period.

Strict rules

If the HCSF then decided to turn off the credit tap, it is because it considered that the banks offered too flexible and generous access conditions, which could have endangered them in the event of a serious financial crisis (which finally arrived).

"Before, banks mainly studied the" remainder to live "of borrowers to accept or not a file, explains Maël Bernier, spokesperson for Meilleurtaux.com.

From now on, they select according to stricter criteria ”.

First, the debt ratio must be limited to 33% of income, that is to say that the monthly loan payment must not represent more than a third of the borrower's income.

Files that reach 35 or 36% could be accepted before, but this is no longer the case with rare exceptions, the HCSF authorizing banks to exceed this threshold for 15% of files.

“In fact, many people find themselves excluded from access to property,” notes Maël Bernier.

According to Meilleurtaux.com 2020 figures, a third of loan requests exceed this rate, and among them, only half are accepted.

A minimum intake

If the low rates allowed access to mortgage loans to people with modest incomes, it is also because they allowed these loans to be spread over long periods, more than twenty-five years.

Again, the HCSF said stop.

“The brake has been put on twenty-five years, testifies Alban Lacondemine, president of Direct Loan and mortgage broker.

We saw files of up to twenty-seven.

But now, even over twenty years, the banks have become cautious.

For this expert, unless you have a strong income and provided you pay a high cost of credit, it is not possible to borrow for the longer term.

Third condition, and not the least, to obtain a mortgage: the contribution.

While a year ago it was possible to obtain a loan greater than 100% of the purchase (which covers housing plus ancillary costs), today it is almost impossible.

Alban Lacondemine confirms this: “The banks are asking for a minimum contribution of 10% now, sometimes more, to cover notary fees and guarantee costs.

And according to the two experts, banks can also ask borrowers to have some savings aside.

Banks are preparing for the crisis

This reluctance, already installed, would therefore only have been accentuated by the Covid crisis.

“Between the loan application and the official signature, there are between 3 and 4 months.

With the risks of the coming crisis, the banks will continue to slow down, ”even believes Alban Lacondemine.

According to him, banks have already reduced by 30% the number of loans granted compared to the same period last year.

And the files of people working in sensitive sectors may be more easily rejected: “For someone who works in the restaurant business, for example, even if he is in post, it will be more difficult.

"

Maël Bernier makes the same observation, but regrets such an orthodoxy in the constraints applied: "The balance sheet of banks is not so bad and the loan system in France is still ultra-secure, with borrower insurance and sureties.

Especially since the banks continue to benefit from negative rates.

It is a shame to deprive so many people of access to property.

"

Young people and low incomes penalized

The first victims of this tightening of screws are, as so often, young people.

At Meilleurtaux.com, 60% of loan requests are made by 35-year-olds, and 45% are under 30 years old.

“Apart from people who benefit from an inheritance or from very generous parents, young people often do not have, or not enough, contributions and savings, explains Maël Bernier.

We are telling them "You will remain a tenant".

"

Alban Lacondemine makes the same observation and adds modest incomes and first-time buyers to the list of victims: “Even the possibility of 15% of cases out of the nail, not all banks use it.

Or only for people with very high incomes.

“The broker slips having had experiences with certain banks which would now refuse any mortgage with incomes lower than 80,000 euros per year.

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  • Real estate loan

  • Bank

  • Economy

  • Coronavirus

  • Immovable

  • Housing