In the age of negative rates, the debate on the future of zero-interest loans is launched

A report commissioned by the government, of which “Les Echos” had a copy, recommends not to extend the PTZ beyond 2021. In an environment of low interest rates, this tool is not sufficiently incentive and especially guides households towards new purchases, estimate inspections from Bercy and the Ministry of Ecological Transition.

A joint report from the Inspectorate of Finance in Bercy and its equivalent at the Ministry of Ecological Transition, consulted by “Les Echos”, calls for an in-depth reform of the zero-interest loan.

Does the zero rate loan (PTZ) still have its raison d’être when interest rates are very low? Two years from the expected expiration of this popular device for the middle classes, the debate is launched. A joint report by the General Inspectorate of Finance in Bercy and its equivalent at the Ministry of Ecological Transition, consulted by “Les Echos”, calls for an in-depth reform of the PTZ. This mission worked in the perspective of the 2021 finance bill, which will be examined in a year and will have to record or not the extension of this boost to the acquisition of a first home.

Faced with the difficulties of access to housing for young households, the debate is sensitive. And as this report underlines, this tool enjoys a “Excellent reputation with the public”. Since its creation in 1995, the banks have appropriated the PTZ and know how to market it well. Its authors, however, denounce windfall effects. In nine out of ten cases, obtaining the zero-interest loan was not decisive in the acquisition of housing, underlines the mission.

For purchases in new buildings in a tight zone (Paris region and Côte d’Azur), the PTZ had a trigger effect for one in four households. In rural areas, where house prices are much lower, this is the case for less than 5%.

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Concerns around the removal of the new PTZ outside major cities

A helping hand to put into perspective

For beneficiary households, the zero-rate loan provides a boost, but that remains to be put into perspective. On average, the aid reduces the monthly payment by 1.4% of income, for example 52 euros for a monthly income of 2,500 euros. All for an aid which has cost, depending on the year, between 750 million euros and 1.3 billion euros to the state budget.

Should we direct this money differently? This is what this report recommends, which underlines the preponderance of new houses in properties financed by PTZ (44% of housing financed). The acquisition of new housing represents more than three out of four loans. A questionable effect, at a time when concerns are increasing about the artificialization of soils and the desertification of city centers.

Encourage buying in the old

Faced with this observation, the report recommends encouraging more acquisitions in old buildings with works, while better targeting beneficiaries and reducing deadweight effects. Whether or not to maintain a zero-rate loan, the question is open: it could be either a negative rate loan, or a device that reduces the monthly payments as did the APL accession, or even a subsidy paid to the purchaser.

While waiting for major maneuvers, these conclusions should temper attempts to modify the PTZ in the finance bill for 2020, currently being discussed in the Assembly. Some deputies are tempted to reconsider the exclusion of the least strained areas, planned for 2020. The report shows that the first turn of the screw decided in 2018 has not had any impact on the construction of new housing in these areas.

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