Borrowers are not the only ones to be penalized by the new difficulties of access to real estate credit. This is also the case for brokers who must change their practices. Explanations.
A drop of 37.3%. This is, according to the CSA Credit Housing Observatory, the measured decline in the production of mortgage loans between September and November 2022 compared to the same period in 2021. Difficulties accessing credit that affect all consumers, including good profiles who do not reach the maximum debt ratio of 35%, noted the notaries a few weeks ago in a study published on November 14. In question, a rapid rise in mortgage rates which reached 2.44% on average for a loan over 20 years on December 26, according to the broker Meilleurtaux. But also a level of wear rate, maximum all-inclusive rate above which a bank cannot lend, which hinders access to credit according to brokers.
Inevitably, the drop in production has an impact on borrowers, but also on the activity of mortgage brokers. The end of 2022 was terrible for a number of brokers, reveals Brengre Dubus, founder of the Union of Credit Intermediaries (UIC). And despite an increase in the attrition rate on January 1, 2023, and a further increase expected on April 1, the first quarter of this year is also likely to be complicated. If the UIC cannot for the moment give precise figures on the number of cessations of activity among brokers, Brengre Dubus assures that it’s a whole ecosystem that is in trouble today. Refusals of files obviously impact borrowers and brokers, but they also mean fewer houses sold for builders and fewer files for real estate agents.
Banks more cautious towards intermediaries
For Sandrine Allonier, spokesperson for the broker Vousfinancer, the difficulties encountered today by the profession also come from the unbalanced balance of power with banking establishments: Brokers remain intermediaries and are dependent on the suppliers, which are the banking institutions. However, the situation has also changed significantly for the banks. Yesterday a loss leader, real estate credit is now used sparingly. The conditions this year were complex because of the rate of attrition, and the bankers also suffered, recalls Ccile Roquelaure, director of studies at Empruntis. Some partners speak of a loss of 5,000 to 25,000 euros for each credit file.
While they are already losing money on mortgages, some banks are now questioning their need to go through a broker, developed Sandrine Allonier. There is a paradigm shift. Yesterday, brokerage allowed banks to capture customers who would not have come spontaneously. For example, HSBC could reach young people, La Banque Postale wealthier people… But today, banks only offer credit to their customers, so that they don’t go elsewhere. They are no longer in the conquest for the moment.
The broker, replacing the bank advisor?
So, is 2023 the year brokers die out? Banks have no intention of letting go of real estate credit, wants to believe Ccile Roquelaure. For now, the expected drop in production is around 10%. compared to what they did in 2022 but the banks are waiting for the recovery, which will be a very strategic moment. They won’t want to miss the boat, and brokers will help them with that.
Real estate loan: find out the lowest rates for your project
Diversification also allows brokers to weather tougher times. Today, brokers are no longer so dependent on banks, assures Sandrine Allonier. Borrower insurance, the repurchase of credits, consumer loans are also possibilities. We also work with banks that only work with brokers and that offer mortgage loan solutions, for example. We do not only work with traditional banks.
And according to a survey conducted each year by Vousfinancer, brokers are also popular with borrowers. 60% of people under 35 say they want to use a broker. A figure that stands at 40% for all respondents.
Brengre Dubus does not see things changing: the more complicated it is to find financing, the more we need to put all the banks in competition, and to be accompanied by a specialist capable of finding solutions. An opinion shared by Damien Pacouil, founder of Prelys Courtage: The broker will once again have a double role: find the best rate and support his client. In addition, there is a risk that in the coming months we will see a return to mixed rates or variable rates. These are technical, specific products, which will require even more support and explanations.
Strengthening the digitization of the process could also give a new advantage to the broker: For several years, some banks have launched projects to digitize the relationship between banks and brokers. This makes it easier to send documents, reports the founder of Prelys brokerage. We connect to their tools to get an immediate first opinion. The banking establishments then have the documents and only have to validate and edit the loan offer. It will change the way consumers buy credit. A time saving for the borrower but also for the bank, because entering his documents in a database which would be shared also makes it possible to avoid possible errors.
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