Real estate credit: almost one in five brokers risk bankruptcy

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Hit hard by the crisis, mortgage brokers are having a tough time. 16% of them were forced out of business in 2022. And if the market situation doesn’t improve, the carnage is likely to continue.

Rising rates, drastic credit conditions, interruption of dialogue with banks… it’s not nice to be a broker these days. And it is no coincidence that according to the Union of Credit Intermediaries (UIC), almost one in five brokers is likely to lower the curtain at the end of the year in France.

And if Occitania and its approximately 6,500 (34,000 in France) mortgage brokers registered with Orias (body responsible for their registration) have been slightly spared, compared to other regions, their number is also destined to decrease.

800,000 real estate sales in 2023

Based in Toulouse, Julien Monfreux, head of the Ace Crédit cabinet at Les Minimes, sees fewer and fewer clients crossing the threshold of his agency. “It’s a very complicated period, we have fewer requests. The number of real estate sales has decreased enormously, consequently there are fewer paperwork for intermediaries”, analyzes the manager of the agency.

Indeed, after chaining the discs, the stone market stalled. This year, industry professionals are counting on a volume of 800,000 sales, far from the symbolic threshold of one million, carelessly exceeded in recent years.

30% less turnover

Paid only for results, brokers, who nevertheless account for more than 40% of overall loans and a third of banking jobs, are seeing their turnover shrink.

“With this market contraction, we expect a 30% drop in our turnover in 2023,” admits Julien Monfreux. But for the director of the agency, letting go is out of the question and he is counting on the dynamism of the region to keep him on course.

“Nous avons de la chance d’être dans une région très dynamique. Nous finançons beaucoup de personnes qui sont en mutation professionnelle. Ils possèdent souvent une bonne situation financière et ne sont que très peu impactés par la hausse des taux”, observe-t -they. Julien Monfreux also relies on a diversification of the services offered to compensate for the deficit.

“16% of brokers were forced to go out of business”

“We can no longer limit ourselves to home loans. We also offer professional loans, borrower insurance… all activities that can be linked to the financing business,” explains Toulousain.

If the Minimes agency has managed to keep its head above water, others haven’t been so lucky. “This year 16% of brokers were forced to stop their activity. Today the market is blocked for all French people,” warns Bérengère Dubus.

A 47% drop in loans granted

At the head of the first and only union of mortgage brokers in France, the woman from Montpellier, originally from Béziers, raises the alarm.

“La baisse des volumes est catastrophique avec 47 % de crédits accordés en moins sur l’ensemble du territoire au premier quarter 2023. Même en 2008 nous n’avons pas connu ça. La profession est vraiment abîmée”, s’inquiète-t- She.

If today the main obstacle remains credit and usury rates, a glimmer of hope appears on the horizon. “At the end of the year, rates will certainly stabilize and the usury rate will follow the trend. As a result, the banks that have not lent too much during the year will recover”, Bérengère Dubus nuances.

Towards a stabilization of interest rates

“It will certainly get better, but we are coming out of such a complicated period that if nothing is done in the meantime, 18% of companies risk closing their business at the end of the year”, concludes the secretary general of the UIC.

We recall that today, in 25 years, the average rate is between 3.5 and 4%. Some banks even exceed 4%. And the increase is expected to continue until September to reach 5%, according to credit experts.

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