While the housing debate rightly centres on improving affordability, supporting households in accessing homeownership, and increasing supply, financing remains a fundamental part of the equation. Without adequate lending capacity, efforts to tackle Europe’s housing challenges and accelerate energy renovation risk being undermined.

Despite the strong political focus on housing parts of the current debate overlook the crucial role of capital markets and the impact of the Capital Requirements Regulation (CRR). European prudential rules matter. In particular, the implementation of Basel standards through CRR3 has a direct effect on banks’ capacity to lend for residential real estate. Without appropriate transitional measures, capital requirements for mortgage portfolios could increase significantly, with a tangible impact on lending capacity.

At a time when Europe requires substantial investment in both new housing supply and the renovation of existing buildings, UIPI has joined leading organisations from the real estate and banking sectors in a joint letter calling on policymakers to ensure that prudential reforms do not unintentionally constrain the financing needed to achieve Europe’s housing objectives.

Signatories 

Build Europe
European Association for Investors in Non-Listed Real Estate Vehicles (INREV)
European Association of Co-operative Banks (EACB)
European Association of Real Estate Professions (CEPI)
European Banking Federation (EBF)
European Federation of Building Societies (EFBS)
European Mortgage Federation (EMF)
European Savings and Retail Banking Group (ESBG)
International Union of Property Owners (UIPI)