Bruno Le Maire calls for a relaxation of the conditions for granting real estate loans

The Minister of the Economy notably mentions the possibility of an “amicable procedure” to reverse a refusal of a real estate loan, in an interview with Le Parisien. The governor of the Bank of France warns of the risks of over-indebtedness.

Facilitate the purchase of housing… and over-indebtedness? The Minister of the Economy Bruno Le Maire pleaded for a relaxation of the conditions for granting real estate loans, in an interview with Parisian put online Saturday December 2.

“We will study new measures to further relax the conditions for granting credits”, declared the minister. Bruno Le Maire also said he would like the creation of a “amicable procedure, between the borrower and the banker, when the latter refuses a real estate loan”For “help to understand why the loan was refused and possibly, if the borrower’s situation allows, lead to a review of the decision”.

“Continuous and singular progression of household debt”

These comments come two days before a meeting of the High Financial Stability Council (HCSF), a body chaired by the Minister of the Economy which reviews the rules for granting real estate loans every quarter. Among these rules, their duration and their weight in relation to the income of borrowers.

Some real estate credit players, such as brokers, are calling for “break the lock” of the maximum debt ratio. This limits the possibilities of taking out a property loan if the repayment exceeds 35% of the borrower’s income.

But at the HCSF also sits the governor of the Bank of France, François Villeroy de Galhau, who insists on the risks posed by too much facilitation of borrowing. “It is desirable that the supply of bank credits now gradually resumes, but without risking over-indebted households: pay attention to the suggestions to forget the common sense standards of the HCSF”declared the governor of the Bank of France in an interview with Republican Lorraine on November 22.

He recently highlighted “the continued and singular progression of household debt”as well as “the marked drift in loan durations and repayment burden”, during the annual conference of the Prudential Control and Resolution Authority (ACPR) in November. The next HSCF meeting will therefore study “possible new technical adjustments, provided that they do not lead to an increase in the risk of over-indebtedness”warned François Villeroy de Galhau.