The rental market in France is very tight, especially in large cities. However, the objective set by the EU to reduce polluting emissions (55% of greenhouse gas emissions by 2030) reinforces this tension. What are the consequences for owners who rely on this income, especially over the age of 60? What to do when the property is no longer authorized for rental?
Since January 2023, accommodation (excluding furnished tourist accommodation) located in mainland France cannot be rented if its energy consumption exceeds the threshold of 449 kilowatt hours of final energy per m2 of living space. If your property is rated G, you can no longer rent it. Rated F, the rent is blocked and rental will be prohibited from 2025. Remember that according to a study by the National Observatory of Energy Renovation, France has around 7.2 million housing units rated F and G, i.e. 20% of the park which can no longer be rented in 2025!
Without forgetting that by 2028, an additional 23% of the housing stock will be prohibited for rental (note E). The tension on the rental market will therefore be “significant”. However, many French people have invested in rental property to supplement their income after retirement and build up assets: these almost “retroactive” regulations put them at risk.
If the DPE is poor and the accommodation has been rated F, G, soon E, the owners risk a significant devaluation of the assets and a substantial loss of income. There are only two solutions: sell the property (for scrapping? and with definitive loss of expected income) or consider renovation work.
Monetize your real estate: the mortgage life loan
Despite financial aid for energy renovation, the costs remaining the responsibility of the owner are high. It is not easy to face an unexpected expense, especially in retirement when disposable income drops. In addition, banks practically do not lend to people over 65 and the cost of borrower insurance, if it is available, becomes tricky.
In this context, the monetization of real estate has already widely developed among our European neighbors and is gradually emerging in France through a life loan guaranteed by the mortgage on residential real estate.
This type of financing is very widespread in England with a total of €7 billion in loans granted in 2022. It is developing almost everywhere in Europe in parallel, particularly in Italy, Spain, Portugal and the Netherlands. In France, certain start-ups (such as Arrago, Dillan, Home Senior, etc.) are marketing new products to address these issues.
Also called Loan 60, the mortgage life loan allows you to borrow using real estate as collateral, without monthly payments, without borrower insurance, or health questionnaire. It also protects heirs because the amounts due upon reimbursement can never exceed the value of the property provided as security. The person remains the owner and the increase in real estate will benefit the heirs. The amount released depends directly on the age of the borrower and the value of the property. The older the borrower, the more they can borrow.
To conclude, carrying out energy renovation work is essential in order to increase the rental yield of the property, increase its value in the event of resale and contribute to the preservation of the environment. So that our retirees can benefit from the rise in the market and get out of the impasse, there are little-known sources of financing like the PVH, granted without income conditions, whatever the need or the project. The public and the environment would benefit from knowing them!
2023-11-08 18:27:58
#Energy #renovation #rental #properties #impasse
