France Plans Measures to Aid Homebuyers as Interest Rates Impact Real Estate Market

According to Yahoo News, the French government is planning a series of measures to assist potential homebuyers in obtaining credit as higher interest rates put pressure on the real estate market. These measures include extending the maximum loan maturity to 27 years from 25 where renovation accounts for more than 10% of the transaction, as well as easing restrictions on bridging loans, according to officials at France's high council for financial stability (HCSF). Banks will be granted more flexibility in determining whether to issue mortgages that do not adhere to all lending conditions. Although the proportion of these loans will still be capped at 20% of the total, the calculation will be based on a rolling period of nine months rather than the current three-month limit. New home loans in France have dropped below €10 billion ($10.8 billion) a month for the first time since 2015, partly due to households becoming more cautious in the face of higher borrowing costs. Finance Minister Bruno Le Maire has suggested that there may be supply issues and that the HCSF would explore ways to ease lending conditions. Bank of France Governor Francois Villeroy de Galhau stated last month that banks could increase lending as they are not utilizing all the leeway they have on the country's mortgage rules. However, he also said that regulators should examine methods to monitor loan refusals by banks. While there has been a significant slowdown in credit distribution, the total volume continues to rise, according to HCSF officials who spoke on condition of anonymity following a council meeting. They also mentioned that a procedure will be implemented for potential borrowers to challenge loan refusals.