Britain’s Chancellor George Osborne just launched a damning indictment over the state of the nations’ property market and related household finances, if the public voted to leave the European Union—dubbed Brexit.
He said on ITV’s Peston on Sunday program that Britain’s housing market would take a significant hit if Brits opted for a leave in the referendum on June 23, Business Insider reported.
The two major hits would be:
1. House prices would crash: This is particularly bad for those owning a home already because it likely means that they would be in negative equity and would either need to sell their home at a loss if they wanted to move or as an investor, the value of their asset would slump.
2. Household’s would be poorer: Even though lower house prices would signal more people would be able to afford to get on the housing ladder, Osborne warns that mortgage products would rise and therefore people wouldn’t necessarily be able to afford to buy a home anyway.
“This isn’t just a big question about who we are as a country. This goes to the heart of people’s financial security,” said Osborne.
“I am pretty clear that there will be a significant hit to the value of people’s homes and to the cost of mortgages. That is one example of the kind of impact, economic impact, that we get from leaving the EU.”
Osborne said that Britain’s Treasury will publish a dossier about the short-term impact of a Brexit on the nation’s housing market soon, which include how it will hurt property values and lead to higher mortgage costs.
At the moment, he said, the Treasury’s long-term projection is that households would be £4,300 worse off, on average, within 15 years of a Brexit.
The average price to buy a house in Britain now stands at £291,504 ($420,654), according to the Office for National Statistics. Meanwhile, the average London property price is at a huge £551,000.
Meanwhile, British Justice Secretary Michael Gove told BBC on Sunday that if Britons vote to remain in the European Union at the June 23 referendum, their country could lose its economic autonomy.
He said: “The European Commission wants to press ahead with banking union and fiscal union,” adding that the EU executive body will also press for more control on banking regulation and taxes in member states.
He said that certain countries in the EU want to deepen the integration and because they have a majority, they would be able to impose policies on the UK.
“We can see how the EU has brought economic insecurity and massive unemployment to countries like Greece,” Gove said.
