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Brexit will temper house price rises according to poll of economists

A poll of economists by the news agency Reuters says UK house prices will rise faster than inflation again this year but those increases could be tempered if this month’s referendum ends in a Brexit. 

If the UK remains in, house prices will rise 5.0 per cent this year on average according to the poll of 17 experts; in 2017 and 2018 house prices are forecast to rise around 4.0 per cent annually.

However, if the UK votes to leave prices will rise 3.8 per cent this year but stay flat in 2017 before moving up a modest 2.0 per cent in 2018, the Reuters poll found.

"Although there is the potential for a shock, concentrated perhaps at the higher end of the market, it is not going to change the immediate problem that supply is too low for current levels of demand," said Peter Dixon at Commerzbank.

The same economists, polled about London house prices, say values will rise 3.0 per cent this year and 5.0 per cent next after a vote to stay in the EU. But if the country leaves they will rise 2.0 per cent in 2016 and just 1.0 per cent next year.

Reuters says Arab investors, some of the biggest buyers of prime London homes, have been holding back from new deals because they fear a property price slump if Britain leaves the EU.

The NAEA and ARLA have already warned of possible "damaging consequences" if the UK leaves the EU.

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