2023-06-13 19:03:35
This is the end of a suspense that has been shaking the French mortgage market for weeks. The High Council for Financial Stability (HCSF), a body responsible for ensuring the stability of the financial system while preserving its ability to finance the economy, decided on Tuesday 13 June to relax the criteria governing the granting of credit by banks, but opting for a change at the margin, or even at the margin of the margin.
Nothing will change for 80% of the loans, which must continue to strictly respect two conditions: a loan duration not exceeding twenty-five years and an “effort rate” (the share of a borrower’s income devoted to repaying of the loan) capped at 35%. On the other hand, 20% of credits are not subject to this double constraint and this is where the HCSF has decided to slightly let go. On the one hand, this 20% flexibility margin will no longer be calculated over a quarter but over nine rolling months. In other words, the banks will be able to temporarily exceed it over one quarter and “correct” the excess over the following two quarters.
This smoothing, we explain from a source close to the HSCF, must “enable the seasonality of credit to be taken into account”, in particular periods of peak activity in the real estate market and the time between the promise to purchase and the final signature. In addition, of this 20%, 16% was reserved for first-time home buyers and 4% for other borrowers. This last share increases from 4% to 6% of total loans. The measure should therefore primarily benefit rental investment and the purchase of second homes.
“Homeopathic measures”
According to Bercy estimates, this double easing, which will be effective in a few days, should increase the ability of individuals to access credit by 250 million euros per month, or around three billion euros in a full year. Not enough to satisfy credit brokers, faced with a sharp drop in their activity for several months and who demanded support and then support.
“These homeopathic measures are unfortunately not up to the challenge”, reacted Olivier Lendrevie, president of Cafpi, who calls among other things for a modification of the method of calculating the debt ratio of borrowers. The Union of Credit Intermediaries, for its part, denounced “the stubbornness and blindness of the Banque de France”. The central bank had indeed prepared the ground for limited measures: on Friday June 9, its governor, François Villeroy de Galhau, had ruled out any measure “which risks increasing the over-indebtedness of the French or the risk of non-repayment”. And the day before, Deputy Governor Agnès Bénassy-Quéré had published a column emphasizing that “Credit developments essentially look like a normalization following the exuberant years of very low interest rates”.
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