Government housing plan: review of key measures

Since the beginning of 2022, the property market has been experiencing certain difficulties. Professionals in the sector are sounding the alarm and private individuals are wondering about the possibilities of realising their life projects. It should be noted that for the time being and if the number of transactions completed is slowing somewhat, the level of activity remains nevertheless close to the record years and the forecasts remain optimistic.

However, the government, having been questioned on this topic, proposes to intervene through a plan designed to boost the market, comprising 14 measures, some of which have attracted the attention of professionals – not necessarily in a positive way. This plan constitutes a first step in the government’s strategy, initiated through the National Rebirth Council (CNR).

The end of the Pinel scheme

This is one of the measures causing debate: the Pinel scheme, in effect until 31 December 2024, will not be renewed. It has already been reduced this year: in 2022, the tax relief rate could be 12%, 18% or 21% of the acquisition amount, within the limit of €300,000 and for a duration of 6, 9 or 12 years. In 2023, the applicable percentages are only 10.5%, 15% and 17.5%.

The effectiveness of this tax relief principle is criticised by some and particularly the Court of Auditors, which considers that the support provided to the building sector in this way is very limited and that the production of affordable rental housing is insufficient, while the cost to public finances is high (approximately €1.5 billion). The final curtain will therefore fall in a year and a half.

It should be noted that in practice, the disappearance of Pinel will only occur in 2036, i.e. 12 years after the signing of the last conventions.

The maintenance of the zero-interest loan

Conversely, assistance with financing property acquisition remains current, with the maintenance of the zero-interest loan (PTZ). Originally planned to end at the year end, it will be extended until 2027.

However, it is being refocused, for newbuilds, on the most strained areas (where demand exceeds supply) and on collective housing purchases. This modification could exclude a large majority of communes on one hand, and greatly harm the dream of home ownership in individual housing for many French people. For older properties, the granting of the PTZ will be exclusively subject to renovation conditions.

Development of the solidarity lease

The solidarity lease (BRS) allows for the separation of land and buildings, to acquire property in a strained area at lower cost. This is a new principle for home ownership, created by the Macron Law of 6 August 2015.

In practice, a household acquires a property, but rents the land from a solidarity land organisation, at a modest rent and for a duration of between 18 and 99 years. Depending on the region, savings can reach 20% to 40% compared with a conventional purchase.

In its proposals, the government suggests raising the income ceilings applicable to the solidarity lease, to allow more households to benefit. Similarly, the map of strained areas will be reviewed, with the aim of expanding its scope.

Assistance for tenants

To facilitate access to renting and faced with excessive demand for social housing (more than 2 million files are on the waiting list), the government intends to develop the supply of intermediate rental housing, with rents higher than those of social housing but lower than those of private sector housing.

Furthermore, the Visale guarantee, whereby Action Logement acts as guarantor for a tenant, will be extended to more than 2 million people over the next 4 years, according to the announcement made by Elisabeth Borne. It should be noted that for the time being and since its creation in 2018, only one million guarantees have been signed.

Facilitating the renovation of the housing stock

Through a reform of the assistance available via the Ma Prime Rénov’ scheme, the executive intends to enable the completion of 200,000 property renovations in private housing, from 2024. For comparison, 67,000 renovations were subsidised in 2022.

Two aspects to this evolution: the increase in credits granted for global renovation on one hand, with a announced simplification of the process, and the improvement of support by work gesture, aiming to facilitate in particular the modernisation of heating equipment or their replacement for so-called decarbonised technologies (biomass, heat pump).

The aim is to bring as many poorly rated properties on the energy performance certificate (EPC) into the top 3 categories: A, B or C. Professionals highlight this commendable objective, but question the resources available to mobilise the envelope necessary to achieve the target, estimated at between 6 and 8 billion euros.

Ultimately, the housing plan proves disappointing for professionals, who were calling for dramatic measures such as controls on land prices, and consider the announcements made as simple adjustments with negligible impact. And it is a fact that the measures in their entirety provide no major assistance to the various actors, by influencing the price level of property, the financing capacity of households, or the conditions for granting bank loans.

The vision developed is more budgetary than strategic for all that concerns property purchase and sale, which professionals lament in search of solutions to satisfy the always strong demand of their clients and sustain their activity.