Real estate credit: the authorities maintain the rules, judging that they are not the cause of the difficulties

They felt that easing would not resolve market difficulties. The High Financial Stability Council (HCSF), which brings together, among others, the Minister of the Economy and the Governor of the Bank of France, decided on Tuesday September 26 to maintain the rules for granting real estate loans.

Today, banks can deviate from the criteria in force for part of the credits they grant, but are far from fully using this room for maneuver, which makes the HCSF say, in a press release, that the establishments “have therefore margins to further increase their credit offer” while respecting current rules.

To combat over-indebtedness, banks are not allowed to lend money if monthly payments exceed 35% of income, nor for a period of more than twenty-five years. They can, however, deviate from these criteria in 20% of cases, provided that this primarily concerns main residences and targets, in almost a third of cases, first-time buyers.

However, the HCSF notes that banking establishments only deviate from the rules for 13.8% of files and that exemptions excluding the purchase of a main residence, which can only represent 6% of the total credits granted, only constitute 2.4%.

Fall in the number of transactions

According to a source close to the body, the prevailing feeling today is that the fall in activity in the real estate sector is explained above all by the fact “that the market is in the process of adjusting to the new conditions interest rates”, increased on average from 1.06% in December 2021 to 3.63% in August 2023, and not by the introduction and rearrangement of the rules in force since 2019.

For months, banks, brokers and players in the real estate sector have been fighting more or less head-on against these rules, while the number of transactions is falling, and pointing the finger at the Banque de France, its governor, François Villeroy de Galhau, being one leading advocates for maintaining the rules.

Several presidents of committees of the National Assembly as well as the general budget rapporteur Jean-René Cazeneuve recently increased the pressure by pleading, in a letter addressed to Bercy, to loosen the constraints. According to MP Sacha Houlié (Renaissance), interviewed on Franceinfo on Sunday, Bruno Le Maire said “studying this hypothesis”.