The government announces the easing of the conditions for granting real estate loans

The High Council for Financial Stability (HCSF), which associates among others the Ministry of the Economy and the Bank of France, decided on Thursday to relax the rules limiting the granting of real estate loans, which had been tightened a year ago. year, to limit household over-indebtedness.

The maximum period of debt will thus go from 25 to 27 years, the maximum rate of debt will be raised to 35% against 33% previously, and the volume of exceptions to these rules will increase from 15% to 20% of the whole. of credits granted, detailed the minister during a conference call with journalists.

This relaxation aims to ensure more flexibility "in particular for first-time buyers, to ensure the dynamism of the real estate market", defended the minister, specifying that the previous rules had been effective.

Indeed, he explained, the share of loans resulting in a debt ratio above 33% and that of loans with a maturity of over 25 years have decreased by 7 and 4 percentage points respectively this year.

Noting, however, that "some banks did not sufficiently respect the rules", which were until now recommendations, Bruno Le Maire announced that he was going "in the coming weeks", with the Banque de France and the ACPR, the financial supervisor, define "the legal modalities to make these provisions binding".

The share of credits outside the nails was not revealed, however.

On Wednesday evening, the governor of the Banque de France François Villeroy de Galhau had already opened the door to an easing, in an interview with Economic Alternatives.

"I am ready to propose a limited, reasonable adjustment of certain criteria, but on the condition that we clearly and firmly stay the course: that of stopping a continuous drift in the granting conditions, which would expose households to the risk of over-indebtedness, "he said.

Pressure from professionals

According to a source close to the HCSF, this turnaround is not to be blamed on a decrease in the credits granted: "we had 20,2 billion (euros) of credits produced last October, and if we start from the month of March, on average monthly production, we are on the way to 2019 which was an absolutely exceptional year ".

On the other hand, this easing should satisfy real estate professionals, who have continued in recent months to put pressure on officials to urge them to review their copy, the rules according to them restricting the real estate sector.

Asked by AFP, Jean-Marc Torrollion, president of the National Federation of Estate Agents (Fnaim), spoke of "a very good signal" and "a reality on the ground taken into account", even if the increase in the rate of Debt at 35% could have been placed a little higher, according to him.

The tightening of 2019 marked a turning point for the financial authorities, who until then had shown their serenity in the face of a booming French housing market, and provoked the discontent of many players.

A few days ago, the French Association of Rental Real Estate (Afil), the Association of Professionals of Credit Intermediaries (Apic), the French Federation of Builders (FFC), the National Federation of Real Estate Agents (Fnaim) , and the National Union of Real Estate Professionals (SNPI) had sent a letter in which they mentioned in particular a "significant increase in the rate of refusal" of credit, mainly for first-time buyers, which they attributed to "HCSF recommendations" deemed "excessive".