Chancellor Believes Vote to Leave EU will Negatively Affect House Price Growth
Chancellor George Osborne has made public his opinion on the impact a Brexit would have on the UK housing market and home owners have taken notice. He believes an exit from the EU would cause an immediate shock to the UK economy and affect the housing market by slowing down house price growth. The effect could impact the market through the year 2018, according to the chancellor.
Energy minister Andrea Leadsom believes otherwise and thinks the value of the euro is much more front and center to the Brexit vote.
Osborne commented on the impact of the vote, saying: "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 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.”
Similar comments regarding house prices were made last week by the International Monetary Fund. The group claimed a sharp drop in house prices could occur.
Although many close to the housing market believe remortgage activity will remain strong through the end of the year, time will only tell if the sector can keep up the current pace. Lenders continue a hefty battle and are offering many deals with low interest rates attached to them.