The mortgage brokerage market - France

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 14 points in eight years. In fact, 43% of them used a broker for their home loan in 2023, the majority to obtain better 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 fell by around 41% in 2023, mainly as a result of the decline in bank lending to individuals (linked to rising rates) and declining property purchasing power. 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.