Interview. Mortgage rejection: “Banks are becoming harsh and demanding with our customers”

Leconte Immo has been present in Blangy-sur-Bresle since 2004. Tony Lecomte is a real estate agent and manager of the agency. (© The Vimeu Scout / Maëlle Beaucourt)

This is a phenomenon that has grown in recent weeks throughout France: banks harden their conditions of obtaining e to reject increasingly loans. As bank rates rise, banks are more reluctant to lend. In his agency based in Blangy-sur-Bresle, Tony Leconte noticed this phenomenon.

News: What is the economic context in the real estate sector?

Tony Leconte: Banks are getting tougher on customers. It used to be 110%, which means that when we did the sales people borrowed everything, so the agency fees, the price of the house and the transfer fees. All this with very few inputs. But from inflation, banks are starting to be demanding. We change customers.

What kind of clientele do you meet?

LT: Our customers are no longer the same. At the moment, they are investors as inflation is on the rise. We see fewer young people buying a primary residence.

So are there fewer purchases?

LT: No not necessarily. The buyers are still there. We only change customers. We continue our sales, they are just different. Investors often make large contributions and sometimes don’t even borrow anything. They just move their money to put it in homes. For example, I recently made two sales for which there is no loan.

What about the wear rate then?

LT: The usury rate is a legal maximum interest rate authorized by banks. It is a thing imposed by the state on the banks so that they do not take too much. This is a rate not to be exceeded and to be respected. At the moment, they are more reluctant to lend, because they are not interested in lending. And for us, that doesn’t make sales easier.

Where is the purchasing power in real estate around Blangy?

TL: Buying power in real estate is automatically decreasing. The higher the inflation, the lower the value of the money, so buyers are less likely to get a loan when purchasing power decreases. They are communicating vessels. On the other hand, little by little, the market regulates itself. This phenomenon is frequent in the real estate sector: the lower the purchasing power of the customers, the lower the price of the houses; repeats itself all the time. The real estate sector is constantly on the move.

Did you feel the difference after the health crisis?

TL: Prices have soared during the last deconfinement. They took almost 15%. Everyone was buying a second home. We have seen city dwellers come to settle in the Bresle Valley. There were houses for sale for 3 years that I didn’t sell because the land was too small, which were eventually sold because it was suitable for city dwellers. So we may already see a change in clientele after the crisis. There are more secondary houses in the surrounding villages.
It is an inexpensive sector. On the one hand we have the influence of the coast, with prices starting to rise. And on the other side are the lands where the prices are cheaper. However today, the citizens who buy it are finished. With home maintenance taking time, they realize they have to come every weekend to do the maintenance. They are not reselling for the moment but it won’t take long.

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What will the real estate market change?

LT: It’s the rental! In the future, dwellings classified as F or G can no longer be rented. So the owners will resell their assets instead of paying for them. So normally there will be more properties for sale in the years to come.

Will the price per square meter therefore increase?

TL: We don’t talk about price per m², it’s not like in big cities like Paris.
Here it is too heterogeneous, we have both 70s pavilions and new ones, we can’t put it at the same price. This is not consistent given the very different geographic sectors. It is certain that there have been better times in the real estate sector, the law on bank loans is difficult. They are the ones who govern at the usury rate set by the state.

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