Real estate credit: more than 4 out of 10 files are rejected

Brokers warn of a risk of blocking the market: the loan rejection rate, in fact, is reaching record levels, directly linked to the usury rate.

For the first time, the 6 professional associations of intermediaries in banking and payment services (IOBSP) – CNCEF, Afib, Anacofi, Apic, CNCGP, La società des CGP – have conducted a survey of the Opinion System of credit intermediaries (1,471 respondents) in order to quantify and highlight the obstacles to their business, which are in particular usury rates and HCSF standards.

The objective of this survey is to provide market players, but also the Ministries of Housing and the Economy, with representative statistics on loan refusals in order to raise awareness of the difficulties of the profession, but also and above all of those who currently wish to access real estate, with the risk of blocking the market if nothing is done to remove the constraints currently affecting the granting of credit.

For 40% of credit intermediaries, more than 4 out of 10 cases are rejected

1uh The lesson learned from this survey concerns the rejection rate observed by IOBSPs since the beginning of the year. ” We have never been faced with so much rejection on our files submitted to banks. For 40% of our intermediaries, 40% of files are rejected and for 85% the rejection rate exceeds 20%. Outstanding results on the problems faced by borrowers in accessing finance for their real estate project », Observes Bruno Rouleau, President of APIC.

First reason for refusal: the usury rate for 36% of the practices followed by the HCSF standards for 31% of them, two major obstacles to accessing credit since the beginning of the year, which therefore represent almost 7 out of 10 refusals!

On the part of the banks, the main reasons given to explain the lack of support for the practices presented by the IOBSPs are the exceeding of the usury rate even for 39% of the cases, or the fact that the borrower does not meet their criteria for 27% of the cases. file. It should be noted that only 15% of the practices rejected by the banks are linked to the fact that the practice comes from a credit intermediary.

Banks are asking for taxes to be lowered so as not to exceed the usury rate

In an attempt to pass a practice despite the usury rate, 18% of banks systematically ask for lower brokerage fees, with the aim of lowering the APR, and 43% often ask for it.

If the increase in rejections is not linked specifically to a banks’ distrust of brokers but more to the level of usury rates, we have a sense of injustice when banks are systematically asking us to lower our fees even if in the current period. we are seeing an increase in the volume of work on each of the credit practices. However, as the important thing is to reach an agreement for our customers, we are ready in some cases to do what is necessary to … Hoping, however, that these context-related fee reduction requests are only very temporary and not compromise the sustainability of practices »Explains Bruno Rouleau.

In addition to this request for a reduction in fees, a decrease in the number of loan requests has been recorded since the beginning of the year. In fact, more than half of brokers (56%) experienced a drop in demand of between 0 and 25% and more than a third of brokers (36%) experienced a decline of between 25 and 50%.

Fortunately, only 10% of brokers experienced a drop in demand of more than 50%. The current period is therefore doubly complicated because there is both a decline in demand linked to the wait-and-see attitude of buyers, but also a decline in the supply of credit with banks less encouraged to lend in this context of declining loan profitability. granted “, Complete.

The usury rate affects all borrowers

As regards the practices most affected by waste related to the wear rate, we find buyers of a main home at 71%, followed by investors with 24%.

All the profiles put together, it is the borrowers aged between 30 and 55 who are the most affected according to 51% of brokers, or the bulk of the market … ” The usury rate has become the main problem for access to finance, and it affects all borrowers, whatever their age or project, so we want to alert, with the whole profession, to the risk of exclusion of a growing number of buyers. resulting in a blockage of the real estate market “Complains Bruno Rouleau.

We must not be fooled by the statistics on the production of new credits for the 1st term of the year, which mainly concern practices accepted in late 2021 or early 2022. The sharp slowdown we are experiencing will be transposed into the data in the autumn, with strong inertia before of a possible restart in 2023 and which will be spread over several months. And this all the more so since the appetite of the candidates for membership has bogged down banking services in the elaboration of projects, now often postponed by the evolution of market conditions. “Says Bruno Rouleau again.

There is an urgent need to better adhere to the reality of the interest rate situation, to make room for banks, whose ability to control their risks with families in many circumstances has been acclaimed, to allow them to cushion this blow. Finally, the relevance of the recommendations of the Board of Governors for financial stability, the effects of which accentuate the downturn, needs to be reconsidered. With more than 20% of the average down payment on projects, customers will not be able to do more and there are not enough alternatives in terms of the rental offer available, which in turn is heavily affected by inflation. concludes.

Survey conducted by OPINION SYSTEM between 8 July 2022 and 22 July 2022 – 1471 respondents

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