House prices to fall if Britain leaves the EU, says Osborne

House prices to fall if Britain leaves the EU, says Osborne
George Osborne has claimed that average house prices could fall by up to 18% if the UK leaves the EU following next month's referendum.

The Chancellor made the claim at the G7 Summit of Finance Ministers and confirmed that the Treasury will this week release a report analysing the short-term economic impact of leaving the EU.

As well as the prediction that average house values could fall by between 10% and 18% in the event of a Brexit, the report will also include analysis which suggests that mortgages would get more expensive, the BBC has revealed.

"One consequence of leaving the European Union is that there would be a hit to the value of people's homes of at least 10% and up to 18%," said Osborne on Friday.

"At the same time mortgages will get more expensive, and mortgage rates will go up," he added.

When quizzed about the suggestion that a drop in average house prices could be seen as a positive, notably for first-time buyers, Osborne was unwavering in his response.

"You don't get affordable homes by wrecking the economy," he told the BBC.

In response to Osborne's claims, former Work and Pensions Secretary, Ian Duncan Smith compared the Chancellor to 'Pinocchio'.

Representing the Leave campaign, over the weekend, Duncan Smith told Sky News: "Let me just remind everybody that it was the Treasury and

George Osborne who said when we came into power in 2010 we couldn't trust Treasury reports because they were always fiddled with by chancellors of the exchequer."

Last week the final House Price Index from the Office for National Statistics reported that house prices increased by 9% in the year to March, up from 7.6% in the year to February.

Meanwhile, last week the National Association of Estate Agents and the Association of Residential Letting Agents said that leaving the EU could have 'damaging consequences', while London Central Portfolio recently suggested a Brexit would be positive for overseas property investment in the UK.

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