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Brexit would hit house prices, says Osborne Brexit would hit house prices, says Osborne
(about 2 hours later)
A UK vote to leave the European Union would cause an "immediate economic shock" that could hold back growth in house prices, the chancellor has said.A UK vote to leave the European Union would cause an "immediate economic shock" that could hold back growth in house prices, the chancellor has said.
In the event of a vote for Brexit, by 2018, houses could be worth up to 18% less than if the UK voted to remain, George Osborne told the BBC.In the event of a vote for Brexit, by 2018, houses could be worth up to 18% less than if the UK voted to remain, George Osborne told the BBC.
But former Business Secretary Sir Vince Cable said a price fall would be good for affordability and economic balance.But former Business Secretary Sir Vince Cable said a price fall would be good for affordability and economic balance.
G7 finance ministers said Brexit could cause a "shock" to the world economy.G7 finance ministers said Brexit could cause a "shock" to the world economy.
The UK's EU vote: All you need to knowThe UK's EU vote: All you need to know
Meanwhile, former Prime Minister Gordon Brown will tell the Fabian Society summer conference that mothers should vote to stay in the EU for the sake of their children's future.
"My message to mothers, worried about their children's future, is that the biggest job creator of the next decade will be Europe's single market," he will say.
'Lose-lose'
An analysis by the Treasury to be published next week will suggest that two years after a Brexit vote, UK house prices could be between 10% and 18% lower than after a remain vote, Mr Osborne told the BBC.An analysis by the Treasury to be published next week will suggest that two years after a Brexit vote, UK house prices could be between 10% and 18% lower than after a remain vote, Mr Osborne told the BBC.
"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," he 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," he said.
"And 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 at the same time, first-time buyers are hit because mortgage rates go up, and mortgages become more difficult to get. So it's a lose-lose situation," he added."And 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 at the same time, first-time buyers are hit because mortgage rates go up, and mortgages become more difficult to get. So it's a lose-lose situation," he added.
Analysis
By BBC political correspondent Chris Mason
With four and a bit weeks to go until referendum day, voters find themselves swimming in a murky ocean of questionable statistics.
And when I say questionable, I'm being polite.
August bodies and grand figures on both sides are making bold claims. And they are both guessing.
So what's happening here? Each side is playing what it sees as its greatest hit.
The let's stay in brigade talk about the economy. The more grabby the headline, the more people who will notice.
The let's get out brigade talk about immigration. The more grabby the headline, the more people who will notice.
There will be plenty more claims where these came from before you pick up that stubby little pencil in a draughty polling station.
The G7 finance ministers said after two-day talks in Japan: "Uncertainties to the global outlook have increased, while geopolitical conflicts, terrorism, refugee flows, and the shock of a potential UK exit from the European Union also complicate the global economic environment."The G7 finance ministers said after two-day talks in Japan: "Uncertainties to the global outlook have increased, while geopolitical conflicts, terrorism, refugee flows, and the shock of a potential UK exit from the European Union also complicate the global economic environment."
Mr Osborne's comments echo those made by the International Monetary Fund last Friday, which said Brexit could cause a "sharp drop" in house prices.Mr Osborne's comments echo those made by the International Monetary Fund last Friday, which said Brexit could cause a "sharp drop" in house prices.
But energy minister Andrea Leadsom, of Vote Leave, said: "This is an extraordinary claim and I'm amazed that Treasury civil servants would be prepared to make it.But energy minister Andrea Leadsom, of Vote Leave, said: "This is 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, ex-governor of the Bank of England, has rightly warned 'could explode'."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, 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 23 June.""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."
Sir Vince tweeted: "Osborne on house prices. Surely big price fall good for affordability and economic balance. Stick to jobs and basic economics George."Sir Vince tweeted: "Osborne on house prices. Surely big price fall good for affordability and economic balance. Stick to jobs and basic economics George."
'Trade hit' Former Work and Pensions Secretary Iain Duncan Smith said financial forecasting was handed over to the independent Office for Budget Responsibility because Treasury reports could not be trusted.
Mr Osborne, who is in Japan for the G7 meeting, said that for the UK to retain free movement of EU goods and services, it would have to accept free movement of people. "Even the Treasury report has to admit that even under their most pessimistic forecasts the British economy would continue to grow after we left the European Union," he told Sky News.
"It's absolutely clear if you speak to the finance ministers here from France, Germany and other European countries ‎that if Britain left the EU, and wanted access to the single market, then we would need to pay into the EU budget, and we'd have to accept free movement of people, but we'd have no say over those policies at all," he said. "And this report also says that house prices would continue to grow."
He said renegotiating trade treaties would be "extremely difficult to do", leading to business uncertainty and stifling investment and hiring. Campaigners for Vote Leave have previously said that lower house prices would help first-time buyers and those in the rental market.
"People wouldn't have certainty over what their future looked like. And all of that uncertainty would add to the economic costs of leaving the EU. It hits people's incomes, it hits the value of houses, it hits businesses and jobs," Mr Osborne said.
However, campaigners for Vote Leave have previously said that lower house prices would help first-time buyers and those in the rental market.
"After we Vote Leave, we will be able to fix our broken migration policy whilst supporting the construction industry with the talent it needs," Vote Leave chief executive Matthew Elliott said on Thursday."After we Vote Leave, we will be able to fix our broken migration policy whilst supporting the construction industry with the talent it needs," Vote Leave chief executive Matthew Elliott said on Thursday.
"The biggest pressure on housing supply is immigration which has made buying your first home and even renting unaffordable for many.""The biggest pressure on housing supply is immigration which has made buying your first home and even renting unaffordable for many."
Mr Elliott added that mortgage lending is on the rise, and "leaving the EU is unlikely to affect mortgages". On Thursday, estate agents claimed a Brexit take around £2,200 off average house prices by 2018.
On Thursday, estate agents claimed a Brexit could knock thousands of pounds off house values over the next few years.
A report by the National Association of Estate Agents said a Brexit could take around £2,200 off average house prices by 2018.
Ratings agency Moody's also said that curbing immigration would ease competition for housing, and slow down house price and rental inflation.Ratings agency Moody's also said that curbing immigration would ease competition for housing, and slow down house price and rental inflation.
Also on Saturday, former Prime Minister Gordon Brown urged mothers to vote for the UK to stay in the EU for the sake of their children.
He told a conference of left-of-centre think tank the Fabian Society: "To mothers who are worried about the prospects for their children in the future and want to know where the jobs will come from, to people who feel that globalisation is a runaway train and it's out of control and uncontrollable, we've got to show that we can manage that in the public interest."