Are the good days of rental investment over? The structures that offer this type of device to individuals are, in any case, gloomy. “Demand for projects has dropped by 50%. This is the most brutal fall in the last twenty years”, regrets Stéphane van Huffel, general manager of Netinvestment and Leemo. Although there are no official figures for the number of people who buy to let, property professionals estimate that it usually accounts for a third of purchases.
First obstacle to rental investment: the difficulty of obtaining credit to finance the operation. Even in good times for property loans, banks were already reluctant to accede to the demand of borrowers who wanted to buy to let.
With the rise in rates, the situation has become even more complicated. “The banks do not take into account all the rents that the operation can generate, and examination of the file then shows excessive debt, particularly if the buyer is still repaying his main residence”explains Pierre-Emmanuel Jus, deputy director of Maslow, specialist in rental investment.
Second obstacle: tax exemption schemes such as Pinel, which made investment in new buildings attractive, have become less attractive in recent years due to more restrictive conditions, in particular a refocusing on the largest cities. In the heyday of Pinel, approximately one in two homes was purchased to make a rental investment. This is no longer the case now. Pinel is also expected to disappear at the end of 2024 and, for the moment, no other device is planned to replace it.
Beware of “frontage prices”
Furthermore, the vast majority of investors now know that sometimes heavy work will have to be carried out if the rented accommodation is energy-intensive. Housing rated E, F or G in the mandatory energy performance diagnosis (DPE) when renting will need to be renovated.
If the work is not carried out, the home will be considered indecent and will have to be withdrawn from rental between 2025 and 2034. Between seven and eight million homes would be affected. When buying an old property with a view to renting, you often have to be ready to carry out work and have the means to do so. “Be careful to include the work in the price offered if the DPE is E, F or G. Some properties for sale have frontage prices, a significant sum must be added to renovate them”, warns Renaud Cormier, president of the French Rental Real Estate Association.
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