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Option Homes Ltd - News- George Osborne Warns of Brexit House Price Drop

George Osborne Warns of Brexit House Price Drop

Date Added 29/06/2016

Britain`s Chancellor of the Exchequer, George Osborne, has warned UK voters in the EU referendum that prices in the UK housing market could suffer as much as an 18% drop should Britain choose to leave the European Union.

He claims it will cause an economic shock resulting in a significant increase in the cost of mortgages over the course of the next two years. His announcement is in response to the revelation that many property investors were starting to include ‘Brexit clauses` in their commercial contracts which allowed them to withdraw from contracts in the event of Britain`s exit from Europe.



Official Analysis on Brexit`s Effect on the Housing Market

Mr Osborne revealed he will be publishing official analysis into the effect that Brexit will have on the UK`s housing market next week, but he revealed in advance that it will say house prices in Britain would drop by up to 18% (with a minimum drop of 10%) more than if Britain voted to remain as part of the EU.

During the G7 summit in Japan, Mr Osborne said, `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. 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% and up to 18%.`



Counter Warning of ‘Perilous State of Euro`

Of course, there wouldn`t be a referendum if everyone agreed with Osborne, and one of the Conservative ministers currently campaigning for a British exit from the EU is Andrea Leadsom, who previously worked in the Treasury with Mr Osborne. She told the Guardian newspaper that Osborne`s warning was `…an extraordinary claim and I`m amazed that Treasury civil servants would be prepared to make it. The truth is that the greatest threat to the economy is the perilous state of the Euro; staying in the EU means locking ourselves to a currency zone, which Mervyn King, the ex-governor of the Bank of England, has rightly warned ‘could explode`. The safer option in this referendum is to take back control of the vast sums we send to Brussels every day and vote leave on 23rd June.`

No doubt there will be more claims and counter claims in the run-up to the referendum, so it will be interesting to read Mr Osborne`s official analysis in full to gauge the veracity of his claims. If indeed Britain`s housing market could suffer a big hit in the event of Britain leaving the EU, such news could very well help make up the minds of anyone with a vested interest in the UK`s property sector.
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