“I don’t believe in the threat of over-indebtedness at all”launches the spokesperson for Meilleurtaux.com, Maël Bernier, invited Monday December 4 on franceinfo, while the High Financial Stability Council has only announced “technical adjustments” on borrowing rates on the real estate market. The HCSF has maintained the maximum debt rate at 35% for households, and no debt for more than 25 years, unless the energy renovation work represents more than 10% of the sale.
No change in doctrine, therefore, despite the upheavals of recent months: borrowing rates have been multiplied by four in two years, which means that we can borrow much less than before, a quarter less on average, while real estate prices have not fallen, -1.1% in two years.
franceinfo: Are you left wanting more with these announcements from the HCSF?
Maël Bernier: Yes, completely. We were waiting for a measure: to put an end, even for a temporary period, to this famous rule of 35% debt. On the ground, we see that it blocks almost one in two files, including among French people who have comfortable incomes. She plays a role of ax. The files are refused because we are at 36, 37, 38% debt.
If we increase the debt ratio from 35 to 39 %, there is no risk of over-indebtedness? Are many files in this situation?
With us, 30% of files are in this gray zone, between 35 and 39%. Beyond that, we actually think that it is riskier to borrow. I am not advocating over-indebted all households by more than 35%, but what I am saying is that we have to look at the issue as a whole and that there are plenty of things that come into play. game: the number of children, age, income… But here, we apply the rule extremely strictly.
“As for the logic of over-indebtedness, it’s a kind of scarecrow that we brandish because over-indebtedness in France is not real estate credit”
Maël Bernier, spokesperson for Meilleurtaux.comat franceinfo
Over-indebtedness is consumer credit. In France, the borrower is still very protected since we borrow at a fixed rate. This is the big difference with all our European friends, including obviously the United States, which also protects us from market shocks and inflation. This is also why I don’t believe in the threat of over-indebtedness at all. Especially since even in 2008, with the subprime crisis, we in France did not experience it, because we were already on a fixed rate.
The only announcement of change is the possibility of borrowing over 27 years when the work represents more than 10 % of the real estate transaction. Does that change anything?
We can consider that this is not bad news. Now, the problem is that it must be specified, because we are talking about energy renovation work. But is it only energy renovation work or do we consider that when we buy a house that is not necessarily in very good condition, that we have to redo the paintings or the kitchen, does that fit in too? That needs to be clarified. And what is certain is that extending the duration of the loan is good, but what is a shame is that we have certain French people who would be eligible for 25 years, with a slightly higher debt. greater than 35% and which we will exceed over 27 years to respect this rule and therefore it will, in the end, cost them more.
Would you say that the real estate market is sclerotic?
I want to say that the worst is behind us. Because we had some good news this fall: we have large national banks which were no longer lending which have returned to the market, and which, in addition, are returning with scales which are lower in December compared to the month of ‘october. This means that they have a real desire to conquer and a real desire to take out real estate credit. The second good news is that rates have indeed quadrupled in two years, but today they are stabilizing. So that means that the floor we are at, around 4%, we will stay there but at least it should not rise again.
And will it go down?
Honestly, I think we are in a phase of stability. We will have to monitor inflation, obviously. But the European Central Bank does not seem to want to raise its rates again.
Rates are stable but, in concrete terms, do you have to earn more, or even much more today than two years ago to be able to borrow the same amount?
Very clearly. I will give you a very concrete example: a couple who earns €4,000 between January 2022 and now, they have a borrowing capacity which has decreased by €70,000. So that means that the property would have had to fall by more than 25% to compensate. But obviously, prices are not dropping by 25 to 30% at all.
“It’s true that if you don’t have savings, you’re stuck. You buy smaller or you postpone your project”
Maël Bernier, spokesperson for Meilleurtaux.comat franceinfo
Do you have any advice for those who want to increase their chances of getting a loan?
The secret is to show up with a perfect bank account. That is to say, we do not multiply consumer credits before, we do not multiply overdrafts in the six months preceding a credit request. For the youngest, it’s a little frustrating because they are on the job market, they are on permanent contracts (supposed to be the passport and the holy grail for having a furniture loan) and they are refused because they have no input. For that, there is a secret, you have to start saving, you have to show that you can save and start saving. For the older among us who may be grandparents or parents: don’t forget that you can pass on to your grandchildren up to €30,000 and for children, it’s €100,000. It can be a boost and it’s tax-free.