We have seen an increase in the number of banks either refusing to lend on certain properties or reducing the level of finance they will make available. The majority of cases have come according to our partners at the lower end of the market, where the property is valued under €100,000 but the problem also exists for costly properties such as Chateaux.
Many banks do not think they will be able to resell the property easily in the case of default and so are either not willing to lend or will lend less. Another trend is for banks to take the lowest and most conservative valuation of your property. This could be the price given by the surveyor for your property to sell within just one month, which is of course lower than if you were to wait 3 or 6 months. By using this valuation, banks can get a better rate when securitising (bundling up and selling on) groups of mortgages to institutional investors.
If you are looking at a property in a prime residential location such as Paris or other large city, there will be no issue. However, there may be a discrepancy for valuations for property in rural areas. We can arrange a free valuation of your property once we have a full set of your documentation and the “compromis de vente” and guide you as to which banks are giving the best valuations.