Content of the study:
The mortgage brokerage market - France

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MARKET OVERVIEW

1.1 Presentation and definition of the mortgage brokerage market

A mortgage broker is an intermediary in banking operations and payment services (IOBSP), whose mission is to find the best interest rate and the best offers through its network of partner banks for a purchase, construction, rental investment or renovation project. They can also assist borrowers in their search for consumer credit, credit repurchase or loan insurance. IOBSPs know the rates, offers and lending policies of the credit institutions they work with, enabling them to guide customers according to their banking profile and project; they can also negotiate the best conditions for the customer with their partners. Using a mortgage broker means using an intermediary between banks and buyers, so that borrowers can save time and get better deals, and banks can get new customers without having to seek and convince them themselves. A broker must be registered with ORIAS, the French organization for the unique register of insurance, banking and finance intermediaries.

More and more French people are using a mortgage broker for their loans, and this proportion has risen by 10 points in seven years. In fact, in 2022, 39% of them used a broker for their home loan, the majority to obtain more advantageous rates.

The end of 2022 and the beginning of 2023 marked a difficult period for real estate brokers. Rising interest rates and the global real estate crisis put significant pressure on their business. Higher interest rates reduced the attractiveness of home loans, resulting in less sustained demand for brokers' services . At the same time, the uncertainty associated with the global real estate crisis discouraged investors and buyers, while increased competition squeezed brokers' margins. Overall, real estate brokers are facing major challenges as they adapt to this complex economic environment.

The sector's business volume is set to fall by around 25% by 2022, mainly due to the decline in bank lending to individuals (linked to rising interest rates) .

In addition, the profession is subject to tighter regulation, notably with the Basel III accords of 2010, which impose greater transparency, capital requirements and improved liquidity ratios.in 2022, for the first time, the number of real estate brokers declined, highlighting the many current issues facing the sector.

1.2 The global mortgage market

There is no global market size for mortgage brokerage. However, it is possible to look at projections for the size of the real estate lending market, enabling us to better appreciate the growth potential of brokerage in this field.

The global home loan market, estimated at $*,*** billion in ****, is expected to ...

1.3 The French mortgage brokerage market

The proportion of brokers

Market share of real estate brokers France, **** - ****, in percent Source: ****

The French are increasingly turning to mortgage brokers when they want to borrow. In ****, they were **% of loan applicants; by ****, this figure had risen to **%, an increase of ** points in * years. We'll look at the details ...

DEMAND ANALYSIS

2.1 The French and mortgage brokers

The French and mortgage brokers

Percentage of French people who have used a broker for their home loan France, **** - ****, in percent Source: ****

The French are using IOBSPs more and more, with the proportion of French people using them increasing by ** points between **** and ****, from **% to **% of home loan applicants in ...

2.2 The French and mortgages

According to an Ifop survey in May ****, **% of those polled have taken out a home loan to buy their main residence, with as many loans lasting more and less than ** years.

Home loans in France

A buoyant property market almost necessarily implies more home loans, the primary determinant of demand for ...

2.3 The French and real estate: revitalizing territories

By ****, */* of French people had already bought a property (***), and over the period ****-****, **% of French people said they had made an acquisition[***].

Housing stock

In ****, there were **.* million housing units in France, an annual increase of *.*% and **.*% compared to ****. Here is the breakdown of these dwellings in ****[***] :

A tenth of ...

2.4 A very sharp rise in interest rates in 2023

After a steady decline since ****, interest rates have exploded in ****

Annual interest rate on new personal housing loans France, ****-****, in percent Source: ****

We can see that :

Early ****s: rates were around *% p.a. **** to ****: economic crisis triggered a fall in prices and rates to around *.*% over ** years Same trend until ...

MARKET STRUCTURE

3.1 Brokers, agents and ORIAS

ORIAS

ORIAS, the body responsible for the unique register of insurance, banking and finance intermediaries, is an association under the law of ****, under the supervision of the French Treasury, created in ****. Since the law of October **, **** on Intermédiaires en opérations de banque et en services de paiement (***), it has ...

3.2 A constantly growing workforce

Number of approved IOBSPs, i.e. registered with ORIAS :

Growth in the number of IOBSPs France, ****-****, in number of IOBSPs Source: ****

The number of IOBSPs in France has grown steadily since ****, reaching a peak of **,*** in ****. However, in ****, it recorded a decline for the first time of almost *%, revealing challenges ...

3.3 Distribution contact points

Mortgage brokerage can take two forms:

In person : in the traditional way, brokers meet with customers in their branch and explain loan solutions to them face-to-face. Online: customers fill in a form about their financial profile and borrowing requirements, and receive loan proposals without any physical contact. New digital solutions are ...

3.4 Market players: independent brokers resist a powerful trend towards concentration

The mortgage brokerage market is essentially structured around two types of players: the big names on the one hand, and small, independent, local companies on the other.

In recent years, there has been a trend towards concentration among mortgage brokerage firms, driven by the sector's big players seeking to consolidate their ...

OFFER ANALYSIS

4.1 Broker revenue structure

In most cases, brokers are remunerated in two ways:

Bank commission: ranging from *.*% to *% of the total loan, paid by the bank to the broker as a business introducer. There may also be certain ceilings and floors depending on the total amount borrowed. Fees: paid by the customer as a lump ...

4.2 Realized margins

Costs associated with the mortgage brokerage business tend to vary widely, depending on the size of the structure. Nevertheless, the business quickly becomes attractive: set-up costs would rise to **,*** euros, and the break-even point would be reached with around ** financings per year. [***]

In addition, and particularly in the case of a ...

4.3 Broker comparisons

Comparison of some real estate brokersFrance, ****

Source: ****

All brokers operate in mainland France, but some are also present overseas, particularly those offering an online service.

The main element negotiated by the mortgage broker is the interest rate. He or she often works on the basis of rate grids based on the ...

4.4 Real estate prices

It's worth keeping an eye on real estate prices for a broker:

by property

Variation in price indices for existing homesFrance, October ****, in percentages

Source: ****

Between the *rd quarter of **** and the *nd quarter of ****, the price of older homes in France as a whole rose by *.*% in * year, with only ...

REGULATIONS

5.1 Overview

Since the real estate crisis of ****, regulations have had a major impact on the brokerage business.

On the one hand, the Basel III accords published on December **, **** imposed limits on risk-taking by banks, leading to the withdrawal of specialized banks from the brokerage segment. [***]

On the other hand, in France, the ...

5.2 Some rules applicable to the IOBSP profession

The Association Professionnelle des Intermédiaires de Crédits (***) provides a complete and succinct overview of the applicable rules and current legislation governing the profession and activity of real estate loan broker.

Non-cumulation rule

Pursuant to article R. ***-* II of the CMF, except for banking operations of a different nature ...

5.3 Texts governing the IOBSP profession

The main text framing this activity is available in articles L.***-* et seq. of the Monetary and Financial Code, as well as articles R.***-* et seq.

The Order of June *, **** relating to Article L.***-* of the Monetary and Financial Code gives a nomenclature of the diplomas required to ...

POSITIONING THE PLAYERS

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Reviews (2)

Reviews (2)

The mortgage brokerage market - France

Publicado en 29/04/2022 by Cédric AUBOIRON - PROLOGIA

Quickly obtained and appreciable synthetic approach. For all that, the content remains quiterelevant!

The mortgage brokerage market - France

Publicado en 25/11/2021 by MICKAEL KUC - Joalya

I am very satisfied with the content and the analysis of the brokerage market, which I find particularly relevant and documented.


Businesscoot Response:

Hello Mickael, Thank you for your feedback. We are happy to read that the content and structure of the study have completely met your expectations. :)

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