George Osborne Warns House Prices Will Be Hit By At Least 10% Under 'Brexit'

Chancellor again cites Treasury analysis - yet to be published - on leaving the EU

20/05/2016 22:01
Ben Birchall/PA Wire

Warnings of imminent financial doom under 'Brexit' were ramped up by George Osborne tonight as the Chancellor claimed house prices could be hit by as much as 18%.

Osborne will again allude to a forthcoming Treasury analysis on the economic consequences of a vote to Leave at the June 23 referendum, which will say Britain’s housing market will be reduced by at least 10% and up to 18% compared to what is expected if Britain remains.

The warning was previously made the warning on ITV's Peston On Sunday, but without putting a figure on the decline. The Treasury has already warned families will be £4,300 worse off if the UK pulls out of the union - though the Whitehall department has been criticised for using calculations it would usually dismiss.  

Speaking at the G7 finance ministers’ meeting in Japan, the Chancellor told the BBC mortgages will get more expensive because of  economic uncertainty. 

"Some say that that would be a price worth paying. I say that we are stronger and better off inside the European Union," he said. ‎

Asked why house prices would be affected by a vote to Leave, the Chancellor added:

"If we leave the European Union there will be an immediate economic shock that will hit financial markets... People will not know what the future looks like. And in the long term the country and the people in the country are going to be poorer.

"That affects the value of people’s homes and the Treasury analysis shows that there would be a hit to the value of people’s homes by at least 10 per cent and up to 18 per cent. And at the same time first time buyers are hit because mortgage rates go up, and mortgages become more difficult to get. So it's a lose-lose situation."

The Chancellor also dismissed a better deal with the EU could be carried off under 'Brexit'.

Osborne has pointed out how the International Monetary Fund, S&P, Fitch and Deutsche Bank are among those to warn over the negative impact on Britain’s housing market from a vote to leave the EU.

John Mills, chair of Labour Leave, has said that house prices in the UK have been "pumped up by uncontrollable, open-door migration and lack of supply".

He said: "The housing crisis has left hundreds of thousands of people in the UK, especially those at the bottom of the economic ladder, with poor-quality, expensive housing.

"The fact that people in favour of Remain think it has to be a bad thing for house prices to fall shows us exactly who they're speaking for - monied business elites.

"Leaving the EU is the most sensible choice for left-leaning voters who want to secure a better future for Britain's most disadvantaged people.”

Also on HuffPost

Suggest a correction