Thursday 8 December 2016

UK homeowners face significant hit from Brexit - Osborne

William Schomberg and Elizbeth Piper

Published 09/05/2016 | 07:13

UK Chancellor of the Exchequer George Osborne. Photo: Reuters
UK Chancellor of the Exchequer George Osborne. Photo: Reuters

Chancellor George Osborne said on Sunday that homeowners would face a "significant hit" from lower house prices and higher mortgage costs if voters decided to leave the European Union in a referendum in June.

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As campaigners opened a new front in the fight over Britain's future EU membership, a leading "Out" campaigner, Justice Secretary Michael Gove, said Britain should leave the single market.

The economy and the impact of a possible British exit, or Brexit, on jobs, wages and trade are a key battleground for both the "In" and "Out" campaigns before Britons vote on June 23 on whether to stay in the 28-member bloc.

Osborne has led the government's argument that leaving the European Union would cost people money.

"This isn't just a big question about who we are as a country. This goes to the heart of people's financial security," Osborne said in an interview on ITV television.

"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."

Opinion polls have indicated that voters believe staying in the EU would be best for Britain's economy, but that support for leaving and remaining are still running neck-and-neck.

Gove, a leading voice in the "Vote Leave" campaign, told the BBC that Britain should leave the single market, but keep British access to it, and criticised "the rules that the European Court of Justice imposes on us".

The "Out" campaign says the economy would flourish over the long term outside the EU as Britain would be able to strike its own trade deals, spend its EU budget contributions at home and scale back rules and regulations.

Osborne responded by saying that leaving the single market would be "catastrophic" for jobs.

The Treasury, headed by Osborne, has said Brexit could cost households 4,300 pounds a year by 2030 in terms of lost growth in the economy and earnings.

A new finance ministry report on the short-term effects on Britain's economy will look at the implications of an "Out" vote on the housing market, Osborne said.

The report will be published in the next few weeks, he said.

Reuters

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