Chancellor George Osborne warns again Brexit will hit house prices
Chancellor George Osborne again warned Brexit will hit house prices, as an immediate economic shock hits financial markets.
Speaking at the G7 finance ministers’ meeting in Japan, he said: "There would be a hit to the value of people’s homes by at least 10 per cent and up to 18 per cent … first-time buyers are hit because mortgage rates go up, and mortgages become more difficult to get. So it's a lose-lose situation."
His comments were based on fresh Treasury analysis of the short-term economic effects of a Brexit, due to be published next week. It looks at how heightened uncertainty will affect financial markets, consumer confidence and home values.
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The government is ramping up its warnings against a Brexit as the June 23 referendum looms. Earlier this month, it said tens of thousands of financial services jobs would be endangered if the UK leaves the EU.
Osborne also said today that it's wrong to assume trade negotiations would be easy following a British departure from the EU, which is the world's largest trading bloc.
After a Brexit, "we would have a two-year period to negotiate our exit with 27 other countries … at the same time conclude over 50 trade deals with countries that aren't even in Europe. In other words, that would be extremely difficult to do," he said.
"Businesses would have no certainty about what the future looked like, so they wouldn't hire people, they wouldn't invest."
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Conservative environment minister and "Vote Leave" campaigner, Andrea Leadsom, rubbished the warning on house prices.
"This is an extraordinary claim and I'm amazed that treasury civil servants would be prepared to make it," she said in a statement.
"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. 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 23 June."