The High Council for Financial Stability under the leadership of Bruno Le Maire could decide to tighten the conditions for granting real estate loans, which could have the consequence of depriving some households of home ownership.
The conditions for granting mortgage loans will be tightened
The High Council for Financial Stability (HCSF) will meet on Tuesday June 15 to define the conditions for granting a mortgage, according to information from Echoes June 10, 2021. The objective which is carried by Bruno Le Maire is clear: it is necessary to tighten the conditions of granting for this type of loan in order to prevent that certain banks do not slip.. By skidding, it should be understood that some banks allow households to contract these loans without trying to limit their over-indebtedness.
Banks will therefore have to restrict access to mortgage loans: the maximum loan term will be reduced from 25 to 27 years and the debt ratio will not be able to exceed 33% against 35% previously. If this hardening was already envisaged at the start of 2020, the disputes that this had given rise to and the health crisis led to the HCSF to review its recommendations, setting the debt ratio at 35% with a maximum loan period of 27 years for the purchase of a property.
The government faces a dilemma
Bruno Le Maire and the HCSF had warned the French that the debate would return to the table in the summer of 2021. The problem is the same as last year. Is that access of the poorest households to mortgage loans will be drastically reduced. Especially since the purchasing power of real estate in the big cities continues to decline.
“The first to be impacted are young couples with low incomes or profiles at risk (seniors, patients, etc.)”, Astrid Cousin, spokesperson for insurance comparator Magnolia.fr explained to Parisian. This is a delicate situation for the government which, on the one hand, risks depriving some households of home ownership and, on the other, risks increasing household over-indebtedness..