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Brexit would mean 'significant hit' for house prices, warns Osborne

Chancellor George Osborne has moved his campaign for the UK to remain in the EU on to housing issues with a claim that Brexit would mean “a significant hit” for prices.

He told Robert Peston on ITV: “You will see the analysis we [the Treasury] will do, but I’m pretty clear that there will be a significant hit to the value of people’s homes and to the costs of mortgages. That is one example of the kind of impact, economic impact, that we get from leaving the EU.”

In the interview he said: “I think it’s very important for people to think about that and we are going to be producing some more research on that in the coming weeks. It’s already clear from the Treasury analysis that for example, there would be a significant shock to the housing market, that would hit the value of people’s homes, that would hit the cost of mortgages.”


He continued: “We’re doing the work on it now but the emerging Treasury analysis backs up what you are hearing from major banks like Virgin Money that the value of people’s homes will be affected and people trying to get on the housing market would be hit because mortgage costs would go up.”

Last week the chief executive of Virgin Money, Jayne-Anne Gadhia, warned that departing from the EU could push British house prices down and interest rates up.

"My personal view is that property prices would be likely to come down, as inward investment, particularly in London, is less available. The risk on a Brexit is I think that property prices come down and interest rates go up."

Gadhia said although buy to let lending would inevitably fall back during the year after the passing of the stamp duty surcharge deadline, she said demand for owner-occupier mortgages would remain strong - but only if the UK stays in the EU. 

"We are expecting a market of about £240bn this year if the referendum vote is to stay in and there is no disruption that way. That is quite substantially higher than our original expectation of £220bn, the mortgage market is definitely flourishing.”

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    Project fear has just turned from comical to downright ridiculous

    Jon  Tarrey

    The In side are indulging in a bit too much Project Fear. There are plenty of good reasons to staying in the EU - which can be put forward in a coherent and lucid way - but they seem keener on scaremongering over everything.

    On the other hand, the Out side only really have Project Fantasy to fall back on. Coming out of the EU single market and then expecting extremely favourable trade deals? Really, Gove, what are you thinking?

    The likes of Cameron and Osborne are toxic for the In side, but Gove, Johnson and Farage are the same for the Out side. The referendum debate has turned into everything we all knew it would - a bitter, petty squabble between the two factions of the Tory party, lots of lies, half-truths and fearmongering from both sides, and very little analysis of the pros and cons of staying or exiting. It has become all about emotion and gut reaction, which isn't what we want.

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    lol. Hippocrite fool. He just smashed house prices with his insane stamp duty hikes. Now he's using Brexit to contradict his views... I am a tory and once upon a time thought Cameron & Osborn might have had a clue, no longer. The pair of them are coming out with more foolish comments everyday!

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    If there is a shock to the house prices i.e they go down surely that makes things easier for first time buyers to get on the housing market. That statement makes no sense, it looks like they are playing every angle negatively

  • David OConnor

    Lost complete respect for Osborne; not sure I will ever be able to vote tory again (the are just pawns for big business & globalization). Small business & aspiration middle classes they have nothing but contempt for. Never has the UK needed a new progressive centre party. Osborne one side Corbin on the other; fortunately Small business & aspiration middle classes continue to make the UK the great country it is regarding of whichever political party tries to mess it up.

    Jon  Tarrey

    Who's Corbin?

    If you think Corbyn isn't progressive, then I'm afraid you've bought the far left lie hook, line and sinker. Corbyn is much more likely to stand up for small businesses and the squeezed middle than this current Tory government (who are, as you say, in the pockets of big business, major corporations and the Murdoch-owned media).

    On Osborne, you're absolutely right. A political chancer, who has no warmth, charisma or empathy, who has overplayed his hand one time too many in recent months. But his unwise words shouldn't be a reason to leave in the same way that Bojo's flustered appearance at the select committee shouldn't be the sole reason to remain. This debate isn't being made too much about personalities, with the real issues at hand once again being ignored. Quelle surprise.

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    How does he KNOW? He has got most things 'un-right' as Chancellor.
    The one thing we all KNOW is that the un-elected people at the EU will impose more on us without our consent. Cameron has obtained no meaningful reforms at all. Leaving will give us back control of our Nation and its future. Staying in after the referendum means they will have us by the 'short & curlys' with no redress.

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    • 09 May 2016 11:43 AM

    So what he is admitting, is that the reason a good number of UK residents are struggling to afford a property, or get on the housing ladder, is because of the 'negative' effects of being in the EU, have pushed prices to high? Interesting...

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    My view on the EU is that it has achieved some positive points in the past but is trying to be something that no-one wants it to be and, it is falling apart at the seams.

    Greece is a basket case that the bureaucrats in Brussels wish to impose undemocratic cabaal of civil servants to run it, much like they did with Italy. Italy, France and Portugal are all broke and waiting to implode with Germans becoming increasingly (and understandably) unwilling to have their hard earned wages be used to bail out failed states who can't budget

    We don't know what leaving might mean (though I take a realistically, generally positive view) but we DO know that staying in will lead to greater integration and loss of sovereignty as well as a strong likelihood of us having to bail out an increasingly politically unstable and financially failed/ failing countries with pressure to accept/ no ability to stop vast numbers of economic migrants placing an even greater burden on our primary services.

    Monetary union was an unmitigated disaster for many countries but is a natural progression for anyone remaining in the european super-state ran by thousands of very highly paid, unelected, unaccountable bureaucrats in Brussels who see ever greater expansion as a means to provide jobs for the boys and girls. Gravy train politics. 'OUT' makes sense on so many levels

  • Brit Sixteen Sixty Four

    I like the way they are trying to blame BREXIT for the fall in house prices. In reality its down to George Osbourne creating a mega housing bubble with Help to Buy, Low interest rates, Funding for Lending, QE and other stupid schemes. The bubble was never going to not pop, it started last year with the far east economic collapse and Russian sanctions.

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    Lenders would not be offering 5 year fixed rates at 2.5% or less if they thought interest rates were going to go up - Chancellor stop your scaremongery and appreciate that in the real world, if the media says property prices will be hit (for whatever reason) then people will be unsettled and property prices will falter until things settle down again. Besides which, leave and maintain control of our lives and markets is surely better than losing control of our finances altogether, along with our judiciary, border control and Army - what would that do to house prices?


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