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Real estate: bankers deemed bad advice on renovation loans

Posted Apr 1, 2022, 6:47 PM

Inflation in the cost of raw materials, and supply problems are a stone in the garden of the energy renovation of the housing stock. Beyond these cyclical difficulties, other obstacles persist. A survey thus highlights the poor knowledge of financial aid schemes for renovation, and the lack of support from banks.

Admittedly, 52% of French people say they pay attention to the energy performance diagnosis (DPE), especially when they have a real estate purchase project, and only 18% of those questioned are unaware of the existence of this tool which makes it possible to classify goods in depending on their energy consumption.

Ignorance of aid

On the other hand, nearly one in two French people (47%) say they are unaware of the aid and schemes dedicated to financing energy renovation, such as subsidized loans such as the eco-PTZ or the new “loan advance renovation “guaranteed by the State, according to a survey, carried out between February 24 and March 8, published by the real estate broker Pretto, and the consulting firm in energy saving Effy.

Expectations are high with regard to credit institutions, whose commitment to these issues is considered too weak. 68% of those surveyed believe that their bank adviser was unable to provide them with advice on financing arrangements for energy renovation. “The lack of support pointed out by the French is partly explained by a very gradual mobilization of the banks on these subjects. They are aware of the issues surrounding the energy performance diagnosis, but they still have difficulty identifying the composition of their credit portfolio. A lack of visibility which does not make it possible to identify the part of the DPE of the goods classified F and G “at the lowest of the scale, underlines the survey.

“Banks are just beginning to monitor energy consumption constraints. They must ensure that their portfolio of real estate loans does not include too many thermal sieves, because in the long term there is a risk of devaluation of the goods concerned”, warns Pierre Chapon, co-founder of Pretto. According to the Notaries of France, in a study released in the fall of 2021 based on real estate transactions in 2020, a house classified F or G sold on average up to 13% less expensive than an old dwelling in label D .

The leader also underlines the difficulty of the banks to control certain aids in particular the treatment of the eco-loan at zero rate (eco-PTZ), because of the cumbersomeness of the administrative process.

Banks in battle order

“Banks are beginning to put themselves in battle order, in particular through awareness-raising actions with their advisers, the implementation of a CSR policy, and the conditioning of the financing of classified F and G properties on renovation work. energy”, qualifies the survey. “Among the major French banks, some are even considering the possibility of granting more favorable borrowing rates to certain customers when the loan is used to finance the purchase of real estate with a good DPE”, breathes Pierre Chapon.

“Alongside the State and energy suppliers, the place of banks in the financing of energy renovation is still too often neglected. However, they are on the front line when buying real estate, ”judges Frédéric Utzmann, president of Effy. Today, the financing of construction sites is largely assumed by the State, through MaPrimeRénov aid.

“From April 15 and until the end of the year, the amount of MaPrimeRénov, granted to replace oil and gas boilers with a virtuous heating system, will be increased by 1,000 euros. A welcome measure for families but which will not be enough to enable them to undertake a profound transformation of thermal colanders”, insist Pretto and Effy.

Raise the debt ratio up to 38%

The two companies plead for the energy issue to be taken into account in the assessment of the debt ratio to obtain a loan, currently limited to 35% for all projects, in accordance with the requirements of the High Council for Financial Stability ( HCSF). For several months now, Pretto and Effy have been offering to raise this maximum debt ratio to 37% or even 38% for the granting of a mortgage to finance energy renovation work. “This proposal was well received by the banks we interviewed. Some consider it possible to allow the only envelope of works to exceed 35% of indebtedness”, specifies Pierre Chapon.

The broker’s other battle horse would be for the banks to integrate retail banking activities into their environmental approach. “To limit their carbon footprint, banking establishments are increasingly committed to reducing their fossil fuel investments. But until then, retail banking activities in general and housing loans in particular seem to be excluded from this approach. However, the mobilization of the banks could represent a major lever of action”, argues Pierre Chapon.

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