More flexibility for banks
Since 1 January 2022, banks have had to comply with the lending criteria imposed by the Haut Conseil de Stabilité Financière (HCSF), a body chaired by Bruno Le Maire, the French Minister for the Economy. These include a maximum household debt ratio of 35% (including borrower's insurance) and loan terms of no more than 25 years for older homes. Banks may derogate from these two rules for 20% of their loan production per quarter. Within this envelope, 80% must be used to finance the purchase of primary residences and 20% is reserved for rental investment. In response to the current difficulties in borrowing, the HCSF announced in June that the proportion earmarked for rental investment would be increased to 30% (from 20%).
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