production soars despite the constraints imposed on banks

    An exceptional year. All real estate professionals confirm it: 2021 should break the records of 2019, both in volume and in production of mortgage loans.

    “We are heading towards another record year for the number of transactions”, notes Pierre Chapon, founder of the online broker Pretto. The same goes for the banks in light of their half-year results. The market leader in real estate credit, Crédit Agricole, saw its production jump by 18% in the first half of the year compared to the same period in 2019, to some 22.5 billion euros.

    In fact, the credit machine is running at full speed, including during the summer period, which is traditionally quieter. According to the Banque de France, home loan production even reached a historic peak of 20.4 billion euros last July and August promises to be just as promising.

    Growing appetite for real estate

    Banks, including mutualists, have calmed the game with brokers who, with their turnkey files, help relieve the work of bank branches, remobilized on home loans after having given priority last year. , business financing.

    This real estate boom is fueled by rates that are still exceptionally low, around 1.12% on average. Even with these rate levels, banks manage to generate margins, if only through the use of deposits, part of which remains paid at negative rates. But rates don’t explain everything. There is also a growing appetite among the French for real estate, a safe haven par excellence in these uncertain times.

    Suddenly, real estate prices continue to climb, at least on the outskirts of Paris and especially in medium-sized cities. As a result, the amount borrowed climbs just as much. “With the constant rise in prices, we are witnessing an alignment of the budget allocated to the real estate project”, underlines Philippe Taboret, deputy managing director of the broker Cafpi.

    Banks fall into line

    All in all, the mortgage market does not seem to have suffered from the constraints imposed on banks by the High Financial Stability Council (HCSF) on the granting of credit. Objective: to avoid any risk of overheating and over-indebtedness of households.

    The first turn of the screw in December 2019 has was slightly relaxed at the start of the year to stop at the principle of a maximum reimbursement rate of 35% of the devoted income (insurance included) and a maximum duration of the credit of 25 years (27 years for the new one). However, banks have a margin of flexibility, ie they can deviate from this standard for 20% of its production.

    This standard was not only confirmed on Tuesday by the HCSF but it will become a rule from January 1, 2022, that is to say legally binding, and subject to sanctions by the regulator, in this case the ACPR, in case of non-compliance. These sanctions will be specified in the coming days: they will undoubtedly be financial.

    It is true that until now, the recommendations of the HCSF were followed very differently by the banks. But regular checks started this spring and reinforced this summer, and the prospect of sanctions, have led them, mostly mutualists, to gradually get into the nails.

    At least this is what the HCSF notes: the proportion of mortgage loans that did not comply with the recommendations rose from 48% in the first quarter of 2020 (which means that some networks were to blithely exceed 60% of non-compliant loans, or even more) to 20.9% in July 2021, i.e. in the outline of the flexibility margin granted to banks (20%). “All the banks are converging towards the same standard without harming the dynamism of the market”, welcomes a source from Bercy.

    Engraved in marble

    For the authorities, contrary to what some professionals feared, there was no crowding-out effect of the most modest households, whose proportion remains stable in the number of cases, or of first-time buyers. Moreover, it is planned that the banks reserve for first-time buyers at least 30% of their quota of 20% of loans outside the norm. And the interest rate environment remains favorable to the less well-off households, which compensate by extending the duration of the loan and an increase in the personal contribution.

    “There is now no reason to change the parameters of a rule which is well established in the landscape and which has proved its worth”, emphasizes someone close to the HCSF. In the event of a rise in rates, which is not for tomorrow, the HCSF could however review its copy.

    For the time being, the only category of clientele that seems really penalized by these rules are rental investors, whose rental income is not taken into account in the calculation of the reimbursement rate (or effort rate).

    The HCSF indeed asked the banks to no longer calculate the indebtedness of these investors, according to the land differential method, which was very favorable to them. “The share of these investors continues to decline », Confirms Pierre Chapon.

    The latter nevertheless expects an equally dynamic second half of the year. It remains to wait until 2022 to see if this strong recovery in real estate is sustainable. The abundant savings of the French, admittedly concentrated on the wealthiest households, could give the market a new boost.