In France, experts expect a slowdown in mortgage lending simple. They rule out any outbreak of the "bubble".
Life "pink" in the mortgage market "will not last." European banks are still benefiting, said Standard & Poor's (S & P) in a study, "the best of both worlds: high volumes of credit and few defects, because of low interest rates. But in Britain, this idyllic picture already peeling. Raising interest rates has increased the carrying costs of households, pushing down the property prices and volumes of loans.
It remains in the "soft landing," said Jean-Michel Six, chief Europe economist at S & P. It has already taken place in Ireland, and is likely to recur in Spain. In France and Italy, it will be even a slowdown. "Property prices are less inflated and the level of household debt is moderate," the agency said.
dream scenario for the Bank of France
For the Bank of France, who worried in a recent study of "sustainability" of the dynamics, origin essentially financial, mortgage loans for household budgets, it's a dream scenario. The debt ratio, which fell in France from 50.5% at end 1994 to 48.8% in mid-1996, recently flew to achieve a "record" of 60.3% to end of December 2004. The burden of repayment on the household gross disposable income rose 6.9% in 2000 to 8.5% in 2004.
The lighter weight of interest (4.9% in 1993 to 2% in 2004) was not enough to offset the increase in the burden of repayment capital. "The property prices have risen faster than household incomes French since 2000 and the weight of the real estate accounts for a quarter of their income, against a fifth in 2000. It is normal to see some slowdown, but it will not be a bubble that will burst, "says Jean-Michel Six.
The tone is also easing the additional concern of the Bank of France, that is to say, the growing share of variable rate loans, representing 35% of new contracts, against less than 10 % before 2002, and which cause "increased exposure to interest rate risk for our clients". But "assuming a sharp rise in short-term rates, the proportion of defaulters certainly increase (...). This scenario is not theoretical, since it has already produced for British households (...), who found themselves massively insolvent with soaring interest rates at the end of the decade 1980 " . Jean-Michel Six, it would require a 3% increase in interest rates to cause a housing crisis, and "there is far". The source
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