Real estate: why getting credit will become more difficult

The dream of becoming a homeowner has been incredibly accessible for French households over the past five years.

With very low interest rates, individuals saw the opportunity to buy.

A permanent job, a stable income, and voila.

The banks responded, and the machine was carried away, until the number of real estate transactions exceeded one million in 2019. A record.

But today, the party is over.

Faced with a maturity - the duration of a loan - and an effort rate - the share of income devoted to the payment of credit - always higher, the Banque de France is trying to calm the real estate fever, which has seen prices rise. fly away.

By calling on the banks to return to “good practices”.

“In 2020, despite the confinements, we had 5.4% growth in mortgage credit, as in recent years.

We have become the country in the euro zone where households are the most indebted.

We have reached a critical threshold, ”warns Emmanuelle Assouan, Deputy Director General for Financial Stability at the Banque de la France.

A trompe-l'oeil relaxation

The High Council for Financial Stability (HCSF) published recommendations in December, in the form of

'

adjustment of its first turn of the screw in 2019. Banks are now invited not to exceed a cost ratio of 35% and a maximum maturity of 25 years.

20% of production may derogate from these rules, under certain conditions.

“Added to this is the fact that we must now include loan insurance in the calculation of the effort rate,” underlines Marie-Christine Ducholet, director of retail banking at Société Générale.

Above all, these new recommendations will be transformed by the summer into real mandatory standards, legally framed

.

“As if we acted anyhow before.

We don't over-induce individuals, and I can prove it!

Our system is healthy, we are not in the United States ”, plague Olivier Gavalda, general manager of Crédit Agricole Ile-de-France.

He highlights the extremely low default rate: less than 1%.

With the crisis, more unofficial criteria

Concretely, traditional banks will restrict access to real estate credit to stay in the nails.

Vigilance on files

will increase further this year.

"The first to be impacted are young couples with low incomes or profiles at risk (seniors, patients ...)", warns Astrid Cousin, spokesperson for the insurance comparator Magnolia.fr.

An example ?

Before, this file of a 26-year-old engineer with 39% debt would have been accepted without problem given the profile of the borrower, likely to see his salary increase rapidly.

Today, banks will prefer a less risky profile given their reduced margin of flexibility.

"Or else, a very important personal contribution will be asked of him," says Maxime Poma, associate director of Persona Courtage.

“Individuals must also show flexibility, in particular by mobilizing savings which are not always used during a real estate acquisition.

However, this is common sense!

»Defends Emmanuelle Assouan.

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Even if the rates are very low, beware of the weight of borrower insurance

To these new conditions are added more informal criteria, directly linked to the crisis.

More and more cautious, banks are showing a certain skepticism towards borrowers employed in the fields of tourism, aeronautics, restaurants or events, the most affected by the health crisis.

“Bankers look at the company, its results, its sector of activity,” emphasizes Cécile Roquelaure.

If you work in a restaurant, it can get stuck ... "

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Still, brokers want to see the glass half full.

"10% of our clients see their applications refused at the start of the year, which means that 90% still manage to obtain an agreement," concludes Sandrine Allonier, director of studies at Vousfinancer.