The Central Bank considers the leasing market as an alternative to mortgages

The Central Bank considers housing leasing as an alternative to mortgages, said «Izvestia» in the regulator. To do this, it is necessary to establish minimum requirements for the stability and transparency of market players, as well as to equalize the conditions for rent and mortgage in terms of taxes. This option is suitable, for example, for those who do not have a down payment. At the same time, the banking sector believes that the new product can only become an addition to existing options, and its development will require support from the state.

With feeling, sense and elaboration

To the greatest extent, the services of the housing leasing market are suitable for categories of borrowers who, for whatever reason, cannot use a mortgage, Izvestia was told at the Bank of Russia. They noted that we are talking, for example, about people without a credit history, about those who went through the bankruptcy procedure, as well as about clients who do not have funds for a down payment.

There are successful examples of the use of such tools in international and Russian practice. For example, rent with option to buy in Italy and Spain. And in Russia — the project of rental housing DOM.RF— said the Central Bank.

At the same time, in order to develop a new direction, a number of issues need to be further worked out, the Bank of Russia emphasized. The development of commercial leasing (rental) of housing as a retail service will require the introduction of regulation in relation to market participants. In particular, the establishment of minimum requirements for their financial stability and transparency of activities, as well as the proper protection of the rights of customers, the Central Bank indicated.

In addition, in order to develop demand for a new service, it is necessary to equalize the financial conditions for housing leasing and mortgages in terms of VAT offset and property tax calculation. It will also be necessary to exclude the possibility of using this product as a way to optimize the balance sheets of developers and circumvent existing regulatory restrictions in the mortgage market.— noted in the Central Bank, adding that an interdepartmental discussion of the topic is underway.

REFERENCE «Izvestia»

Leasing is a long-term lease of property or equipment with the possibility of redemption in the future. Companies and individual entrepreneurs often resort to this service. For private clients, the product is considered less profitable compared to a mortgage, since VAT (accrued monthly) is paid by the consumer.

The fact that the development of the market for rental and leasing of housing will be worked out as an alternative to mortgages is stated in the strategy for the development of the financial market until 2030. The document was prepared by the Ministry of Finance and the Central Bank and approved by the Cabinet at the end of 2022. The document noted that increasing the affordability of housing in Russia will be facilitated by the development of a new segment, which provides for, among other things, the possibility of a phased acquisition of real estate property with the condition of renting the unredeemed part.

Izvestia sent a request to major participants in the leasing market about plans to work in this direction.

Traditionally, leasing is a tool to support entrepreneurial activity, it contributes to the modernization of means of production and is designed for legal entities and individual entrepreneurs, explains Tatyana Pozdnyakova, director of the United Leasing Association (OLA). According to her, the distribution of this product to residential real estate involves working with citizens, which is not typical for the vast majority of companies on the market.

In addition, there are conflicts with VAT and a number of other issues that require serious study and reflection before starting active work in this direction, she pointed out. Tatyana Pozdnyakova also noted: given that citizens as consumers are an unprotected party, transactions with them require additional protection. Based on the foregoing, additional requirements may be applied to leasing agreements with individuals, including housing, and companies planning to work in the new sector should be prepared for this.

Leasing vs mortgage

The opportunity to purchase real estate on lease can only become an addition to the existing instruments on the market, but not their full-fledged alternative, according to VTB. This option may be of interest to customers who, for various reasons, receive refusals from banks, the credit institution emphasized.

PSB is confident that for individuals, the key criterion for choosing between the two products will be the interest rate and the amount of the monthly payment. Since the cost of funding (raising money) from banks is generally lower than from leasing companies, mortgages will remain the most popular offer.

Leasing as an intermediate option between the white mortgage market and the predominantly gray rental segment has the right to life, if you remove some built-in disadvantages. For example, a VAT requirement and a high property tax (usually they are “wired” as a percentage of the product. — Izvestia)— shared in the bank «DOM.RF».

In Russia, about 10% of households rent housing and about the same number bought an apartment on a mortgage. The new tool could attract customers from both the first segment and the second, but it is unlikely to be a significant share, DOM.RF bank estimated.

The advantages of leasing are that citizens will be able to consider such real estate as potentially their own and buy it out in the future, the credit institution noted. Whereas the main disadvantage is the significant difference between the market rates of rental housing and mortgages: 4-5% versus 11%. That is, it will be unprofitable for the leasing company. Therefore, it is unlikely that the new tool is viable without special subsidy programs from the state.

The Zenit bank adheres to a similar position, noting the need for benefits from the state.

The new tool will give some hope to the segment of “unpromising borrowers” ​​in resolving the housing issue, although its results so far seem doubtful, — noted in UBRD.

Now housing leasing does not have significant advantages over mortgages, Aghvan Mikaelyan, a member of the board of directors of the FinExpertiza audit and consulting network, is sure. According to him, the only plus is that this market is less regulated and a person can get an apartment for use with the right to buy it later.

The expert believes that the advantage of leasing could be the inclusion in the contract of the possibility to return the money paid (including penalties), if a person does not have the funds for further payments. In general, this product is suitable and may be more beneficial than a mortgage, only for people with high incomes who have a specific financial plan.

source: «News»