Faced with the proliferation of criticism of the criteria for granting mortgages, deemed too strict by banks and the real estate sector, the Banque de France replied Thursday on its blog, referring instead to a “normalization” of credit.
Referring to the decline in the number of loans granted recently, the Deputy Governor of the Banque de France Agns Bnassy-Qur considered that this fall was essentially a normalization after the exuberant years of very low interest rates. In April, excluding loan renegotiations, 12 billion euros in new housing loans were granted, compared to around 20 billion per month in 2021.
France ranks above Germany
Despite this decline, France is above Germany, which is nevertheless more populous (9 billion euros, a very clear decline over one year), and well above Italy and Spain (each less of 4 billion euros), noted Agns Bnassy-Qur.
This reaction comes as a possible relaxation of the rules for granting credit is to be discussed on Tuesday within the High Council for Financial Stability (HCSF), a body which brings together in particular the Minister of the Economy Bruno Le Maire, rather open to the question, and the Governor of the Banque de France, Franois Villeroy de Galhau, so far reluctant.
At 65% of gross domestic product, French household debt is the heaviest of the four major countries in the euro zone, whereas it was among the lowest ten years ago, also argues Agns Bnassy-Qur, for defend a status quo on the allocation rules.
Drugs
Currently, banks must respect certain limits concerning the level and duration of indebtedness. They can, however, deviate from it for 20% of the loans, provided that these exceptions mainly concern the acquisition of a main residence and, in one third of cases, first-time buyers.
The banks would like for their flexibility to finance more rental investors or second homes.
But for Agns Bnassy-Qur, loans for rental investment are above all hampered by their low profitability, particularly in stretched areas.
According to her, the normalization of credit is also not necessarily a bad thing if it limits the sprouting of second homes and furnished tourist accommodation.
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