Just out of interest why is it so hard for people to get mortgages in France, including French people.
When we were searching for a property to buy the first question any agent asked was, do you require a mortgage.
We didn’t need one, but nearly all agents told me they don’t show properties to people who require a mortgage.
The housing market is very illiquid there, certainly compared to the UK, you would think the goverment would push lenders to be more accommodating.
I find that hard to believe to be honest. My family often go and look at houses they might be interested in upgrading too and have never once been asked this question and by upgrading they would need a bigger mortgage too. Courtiers do this for a living, find the best affordable mortgages for people wishing to buy a house. Sounds like the agents did not want your business to me and I know several people locally who have just got mortgages with no problems. I notice too on LBC, immos are putting charts underneath all the property details of how much monthly repayments would be - half the time they don’t make sense and are over the top!
It didn’t affect what we wanted to view, as we didn’t need a mortgage. It was just that was their pre qualification question, it seemed as if it was directed from the owners.
Maybe things have changed since brexit, we had no trouble at all when we purchased with a CA mortgage all those years ago.
Why should British norms apply in France?
I have lived in multiple countries and have purchased in all but one, that one I was not allowed; all are different.
I am not sure what British norms are in this case and why that is even relevant.
I just wondered why I was told it was difficult for people to get mortgages in France. Perhaps it just isn’t true.
But one house we looked we were told had an offer on it but the agent said the offer was worthless because a mortgage was required so it seemed like a genuine issue.
It also cropped up again in our sales contract that should it turn out we weren’t cash buyers and we did in fact need a mortgagee, the owners had the right to pull out. The concern being that would be difficult to get.
Perhaps it might be related to the value
Funnily enough I was told exactly the same thing yesterday by a local who works for Services Technique in the nearest village. We were standing outside a lovely Normandy barn that has been for sale for months, and he said the reason is that French people round here can’t in practice get mortgages, and therefore can’t buy such properties. He explained that French banks typically demand high percentages of deposits, required full repayments over relatively short periods, and also require excessive proof of every single item of income. I obviously have no idea how true what he is saying, but he had no reason to exaggerate, and was simply reporting what he believed to be the case.
When we bought our Normandy house in 2018, the very first question when we made our offer to the vendor was did we need a mortgage, since the only offer they’d had on their property had fallen through due to the difficulty in obtaining a mortgage.
I have no first hand experience but given that credit cards are not really a thing in France unlike the UK and US, I suspect it may be related to the general French attitude to debt, as a thing to be avoided.
I’m sure mortgages exist and are obtainable but probably not quite as freely as in Anglophone countries.
On the flip side it may explain why French property prices are nowhere near as lunatic and inflationary as those in the UK!
France calculates the amount you can borrow in its own way, and it is stricter. In the UK you can still get mortgages where payments represent 45% of your income, and apparently more in some cases. Not so in France. 35% is generally the maximum. You can also only borrow a smaller percentage of the property value.
So payments of 35% of your income can only cover say 40% of cost of property you will be restricted as to what you can buy.
When one remembers the misery of 2008 and the people with 100% mortgages who ended up with nothing this approach seems sensible to me.
Indeed. I bought a flat in London in the early 90s at the height of a property boom (had no choice as to the timing) - then the Chancellor Nigel Lawson abolished dual mortgage tax relief six months later and I went into negative equity for the next 13 years - only just coming out a few thousand ahead when I sold up to move to Turks & Caicos in 2003.
Well maybe not British norms.
Every country except the UK in which I have purchased properties, mortgages have been a challenge to obtain. I did not require a mortgage in France. The last mortgage I had, the minimum deposit was 20%; that was not an insubstantial sum of money.
Just accept it as it is.
Thank you Jane, this probably explains it.
They are very easy to get in the US and Canada.
For me there is nothing to accept or disagree it was simply a question of asking why.
Very true in terms of getting a French mortgage. When we applied to BNP we had to detail all outgoings, highlight all over a certain amount that were regular and explain what they were for. We were told that as there is no ‘credit rating’ system in France, the banks rely on detailed evidence of income versus outgoings to ensure that the mortgage is affordable. France is not a ‘buy today, pay eventually, possibly’ country.
Always used to be mortgages repayments to be no more than a third of your income so you can continue to live, eat and pay other bills. No deposits were ever required though, that may have changed for first time purchasers but around here, social housing is mandatory for every so many new private dwellings so that is alive and well - something the UK should do so that new estates have a mix of social and private dwellings.
They already do.
Unfortunately developers almost always force local authorities to accept less affordable housing than would be their preference.
Well the councils give permission on that basis and often then the developers squeak loudly about not being able to make enough profit on the project etc and then the weak willed councillors and almost invisible planning officers allow the reduction of ‘affordable or social housing’ . The result is the developer gets to build their sub standard non inspected buildings and stroll away with their profit and the result they wanted in the first place.
Civil servants again!
Again, civil servants (or, in this case, council officers) advise and elected officers decide. Democracy in action.