If politicians introduce guidelines and laws whose primary aim is to protect consumers, this does not necessarily mean that this effect will also be achieved in practice. It is not uncommon for political projects of this kind to miss their target entirely. One of the best examples of the delusion of regulation among political circles is the so-called housing loan directive for real estate loans.
To protect consumers from over-indebtedness
Created and launched to protect consumers from over-indebtedness in the basic ideas of the regulation or directive. There would be nothing to be said against this if, as already mentioned, it was the same. Practice shows, however, that the desired consumer protection with a real estate loan goes so far that certain age groups now almost no longer receive a housing loan at all. The older generation in particular is disproportionately affected. The reason lies in the construction of the housing loan directive. A point that should now be changed again.
It is a fact that, with the introduction of the directive, the banks above all expressed their displeasure. Because banks feared the loss of numerous, sometimes highly solvent customers in the area of real estate loans. Because the housing loan guideline is not based on the value of the property when evaluating a customer for a real estate loan, but on the age of the borrower. In plain language, this means that the older a potential customer is for such a real estate loan, the less likely it is that the loan will be granted.
A basis that is now taking revenge, because even highly solvent older citizens simply no longer get any loans. A fact that understandably neither the banks nor the people concerned like it. The criticism is getting louder, which means that the federal government now wants to make further changes to the directive.
Consequence of the guideline: fewer and fewer real estate loans
Corresponding figures on the subject of real estate loans demonstrate the need for corresponding changes to the housing credit directive. Because, according to the transaction platform Europace, which specializes in real estate financing, the number of loan agreements with older people fell significantly. In the age group 40 to 50 years, compared to the 11 months before the directive came into force, by 5.88%.
If you look at the number of the so-called “best agers”, ie the age group of over 60-year-olds, there is an even more drastic decline. The platform even recorded a decline of 12.69%. The rate of real estate loans rose by 6.53% for those aged 18 to 30 and around 2.66% for those aged 30 to 40. However, the figures also reveal that the number of real estate loans has declined across all age groups with the introduction of the directive.
Efforts to relax the property loan directive
The insight from these figures is that, in particular, the credit supply of older people seems to be endangered in spite of the corresponding credit rating and solvency. A circumstance that should now be counteracted. A relaxation of the directive is being considered. There is also an obvious need for clarification on follow-up financing and debt restructuring.
It also sounds from the most diverse corners of politics that borrowers should be excluded from the tightened rules of creditworthiness. Another part of the political discussion around the credit directive is the topic of the “employment biography”. For example, the credit check for real estate financing should take into account the accumulated wealth of older people and the expected income of younger people. All in all: the housing loan guideline seems to remain an “immature” project.