Chancellor states Brexit will be a lose-lose situation for mortgages

May 24, 2016 by Brendan O'Neill

House Prices

According to recent analysis by the Treasury, house prices could fall by as much as 18% if the people of Britain vote to leave the European Union in June 2016.

The document compiled by the Treasury also reveals that the interest rates of mortgages would increase as a result of Brexit. The Chancellor, George Osborne, revealed that the document predicted the short term effects of Brexit, which included property values falling, losing between 10 and 18%.

The price of an average property in the UK has been listed as £292,000 and according to the Office for Budget Responsibility, house prices will increase by 9.4% during the coming two years. However, the forecast by the Treasury means that the average house price will fall by as much as £57,500 by the year 2018. Houses at the higher end of the market will lose far more.

The Chancellor 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. And in the long term the country and the people in the country are going to be poorer.”

Osborne added that first time buyers may also find it harder to get onto the property ladder, as mortgage rates will increase and will become much harder to obtain. If the people of the UK do vote for Brexit, mortgage advisers who have received CeMAP training will find themselves in greater demand, as home buyers require advice.