In July, the credit production fell further to fall to 12 billion euros, well below the average of the last five years, a drop of almost 45% compared to the same period last year, according to data published by the Banque de France in early September .
In an interview given to Parisian This Tuesday, the Minister of Economy and Finance, Bruno Le Maire, said he was in favor of relaxing the criteria for granting real estate loans. The minister has been giving us the same speech for many months! “ I am studying the possibilities of relaxing the rules for granting credit for banks, such as an increase in the maximum debt ratio” he explains, before adding: “ Today they are too strict “. This would involve reviewing the limit of 35% effort rate set by the High Financial Stability Council (HCSF), which has also capped the maximum duration of loans at 25 years.
But what is he waiting for to do it? It is established that these criteria imposed on banks since January 1, 2022 prevent them from lending to individual investors (individuals and SCIs).
On January 1, 2022, the recommendations of the High Financial Stability Council (HCSF), which we note are chaired by a certain Bruno Le Maire, in terms of real estate loans, have become obligatory for banks and their customers:
– The total amount of debt compared to income must not exceed 35%;
– The debt must not exceed 27 years;
– The possibility of deviating from these criteria must not exceed 20% of credit files for each bank (16% for first-time buyers of the main residence, and 4% for other files).
These criteria did not bother anyone as long as they were “recommendations”. This was, generally speaking, part of the usual rules for banks. The rules did not prevent each establishment from assessing the files on a case-by-case basis and deviating from what were then only recommendations. But since January 1, the recommendations have become intangible rules.
Thus, a household which wishes to acquire real estate with the objective of renting it will have to comply with the same rules as a household which buys its first house to live in it, namely “ an amount of debt compared to income, of 35% maximum”. Suffice to say that in the first case, the equation is impossible! In rental real estate the effort rate is 80 to 100% of income, especially as rates continue to rise: the rents received make it possible to reimburse all or part of the purchase and/or work on the duration of the loan.
As a result, since January 2022, 60 to 80% of individuals with real estate projects have been excluded from access to credit! The letter has replaced the spirit of the laws. The standard has replaced judgment. “ Unnecessary laws weaken necessary laws” as Montesquieu wrote.
How to put an end to “thermal strainers” without access to credit?
By 2028, the government wants to eradicate all “thermal sieves”. These are the most energy-intensive homes, classified F and G on the energy performance diagnosis. France has 4.8 million, according to the Ministry of Ecological Transition, “7 to 8 million” according to FNAIM. Among them, half are rented and most are in the private park. Rural municipalities have, on average, the most energy-intensive housing, with almost 30% of homes concerned.
From January 1, 2024, all housing whose energy consumption exceeds 450 kWh/m²/year (classified G on the DPE) will be prohibited from renting according to a decree published in the official journal.
For several days the President of the Republic, then the government through its spokesperson, announced that they even intended to ban their sale! Ban on renting, ban on selling, ban on borrowing! So what is the project: letting these homes fall into ruin?
Let banks lend and individuals invest
Whereas a simple method would be to let the banks do their job, namely renting money to investors able to return it during their project and pay the rent! On real estate, most often, loans are accompanied by death, disability insurance and a mortgage.
In the current crisis, private investors must be encouraged. Many renovation projects, both in our cities and in our countryside, do not interest large construction groups.
The HCSF criteria must therefore be relaxed for landlords. Individual landlord owners should be able to choose to amortize their investments in construction without going through the creation of a company (SCI, SARL, SAS). Stone aid must be the same for everyone and not reserved only for urbanized areas.
Today’s credits are tomorrow’s work.
Depriving ourselves of private investment in rental real estate is totally counterproductive in a France which, more than ever, needs growth, needs to build, needs to renovate, needs to insulate, needs to agree, to provide accommodation in the private park.
In 2021, 1,325,000 households had taken out a mortgage loan. 31.4% of households had at least one mortgage loan. The value of the outstanding amounts was 1,354 billion euros. A real success for our economy.
In France, the building industry brings together more than 400,000 companies which employ 1.1 million people. Today’s credits are therefore tomorrow’s work.
Bruno Le Maire, Minister of the Economy and Finance and president of the HCSF, instead of playing around in circles and writing novels, would be well advised to reopen access to credit that he closed on January 1, 2022. As the saying goes: “When the building goes, everything goes!” “. Today, nothing is going well: after that of the banks, it is the artisans’ order book which is being emptied…
2023-09-30 12:39:22
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