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Property Investors in France Finding Funding Hard to Acquire

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European Union  Europe  Buy to Let  First Time Buyers  France  John Busby  bank capital adequacy  real estate loans  Athena Mortgages 

Property Investors in France Finding Funding Hard to Acquire

By - Monday 06 June 2011

Investors in France are finding that the country's banks are becoming more reluctant to offer real estate loans to overseas buyers, it has been claimed. Athena Mortgages has commented on rumours that the trend is a result on some institutions having already reached their targets for residential lending for the year.

The firm noted that if this is true it indicates a lack of liquidity and increase in risk aversion within the market. Indeed, there also seems to be a reduction in the time that interest only mortgages run for and an increase in the net assets required for an interest only loan.

"Several banks have reduced the amounts they are willing to lend to borrowers from outside Europe, whilst one major lender has restricted their products to EU citizens only," said director John Busby.

In addition, a number of French banks have started adopting Baslel III criteria. The new global regulatory standard on bank capital adequacy and liquidity requires that the total outstanding loans should be no more than six times a borrower's income.

"Serial investors with large buy to let portfolios and first-time buyers, in particular, are the most vulnerable to the changes, as lenders appetite for risk recedes," Mr Busby added.

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