Credit production up 2.3% in 2020: good resistance thanks to catching-up effects

The Banque de France has just published its data on the production of home loans for the month of December 2020. Overall, and despite the two confinements, production reached a total of 252 billion euros, against 246.3 billion in 2019, notably thanks to the increase in loan renegotiations, but not only … Despite a chaotic year, the production of loans linked to transactions is stable, thanks to a catch-up effect after the first confinement in particular.

Sustained loan production in 2020, thanks to renegotiations, but not only …

In 2020, despite a year marked by the health crisis, two confinements, and a tightening of the conditions for granting credit following the recommendations of the HCSF, loan production is up slightly, by 2.3% compared to 2019, to 252 billion against 246.3 billion! This is linked in particular to the increase of almost 12% in loan renegotiations.

In the first half of the year and in particular during confinement, the movement in loan renegotiations started to increase sharply. According to figures from the Banque de France, loan renegotiations even represented 47% of new loans (9.6 billion euros) in April, against 14% in December for an amount of 3 billion euros. Sustained activity also noted by Vousfinancer in its network of branches. In the 1st semester, at the end of June, credit renegotiations increased by 53% compared to the same period in 2019 and their share in credit production doubled! They represented 15% of credit production in the 1er half of 2020, compared to 7% in H1 2019.

In the end on average, this year 23.7% of new loans were renegotiations or loan repurchases according to the Banque de France.

The credit renegotiation movement has picked up strongly this year for several reasons. Many requests that had been filed at the end of 2019, at a time when rates were again very low, were not processed until 2020, due to the priority given to acquisition files. In addition, those who wished to renegotiate their credit but had not yet done so, took the time to carry out the procedures during the confinement, and not being dependent on a notary signature, these files were able to quickly lead to the spring. With the recent rate cuts, the movement should continue in 2021 because there are still great opportunities to renegotiate your credit for all those who repay a loan at more than 2.5%.

But also good resistance to credit production because of a post-containment catching-up effect

Excluding credit renegotiations, 2020 production is equivalent to that of 2019, even though the year was marked by two lockdowns, a health crisis and stricter grant conditions in line with the recommendations of the High Council for Financial Stability . Production linked to transactions thus reached 192.4 billion euros, against 193 in 2019, thanks to a post-containment catching-up effect.

“During the 1st confinement, which surprised everyone, few banks granted loans, in particular because of the lack of personnel and the difficulty of doing it remotely. Either way, the real estate market was at a standstill and production fell to € 10.7 billion in April, one of its lowest levels, then remained around € 13 billion until July. , before rebounding to more than 20 billion euros in October, a record! During the second confinement, production was able to maintain itself… From a macroeconomic point of view, the real estate market was finally very resilient in 2020 ” analysis Julie Bachet, Managing Director of Vousfinancer.

What forecast for the production of credits in 2021?

If it is too early to make medium or long-term forecasts, loan production should be maintained in 2021 : “Banks are keen to lend to attract new customers via mortgage loans, which remain their main vector of conquest. In addition, they have loan production targets for 2021 equivalent to those for 2020, and therefore ambitious … Finally, rates, which should remain low, should continue to boost demand in a context of a slight easing of credit conditions. The great unknown is therefore the evolution of the economic and employment situation and its impact on the market, but the fact that real estate is a safe haven should contribute to the dynamism of the real estate market this year ” concludes Julie Bachet.

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