There might be a hint of misplaced pessimism and something slightly odd about Chancellor of the Exchequer George Osborne’s announcement that house prices will fall by up to 18% on a Brexit, given that his help to buy scheme pushed prices up, then stamp duty changes in 2014 pushed high-end house prices back down and more recently the buy to let March stamp duty changes have just triggered another blip in the market which in itself could impact on prices in the sub £300,000 sector.
He appears to love the prospect of a decline in house prices and you would be forgiven for assuming he is one of the most left-wing Chancellors imaginable, yet nothing is being done to tackle the real problem of creating enough supply of house builds to satisfy the need for property to buy or rent.
Looking back over the years when a truly sizeable drop off in house prices has occurred, it has in all cases been to do with significant events on a global scale, from the 1974 old crisis with three-day working week in the UK through to more recently in 2008 with the worldwide banking crisis. I am not sure a Brexit will be in the same league and indeed in a recent poll of real live buyers on McCarthy Holden’s books 88% of buyers said the EU referendum outcome would make no difference to their buying plans. They need to move and there is not enough house stock choice or availability.
So will house price drop by 18% on a Brexit?
They could, but they could also go up and then, of course, there is the world war three that George and David think could also happen and in those circumstances, property prices would be the least of our worries.
John Holden
P.S. Just a bit of fun about the use of fear, overall impressed with George Osborne’s management of the wider economy but yet to be convinced about his house price predictions.