11:17 GMT16 June 2021
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    Fears that house prices would fall following the UK's vote to leave the European Union have been "overblown" after a new survey suggested average house prices are set to rise by 3.3 percent a year over the next five years.

    Before Brexit, ex-chancellor George Osborne warned that house prices would drop by 18 percent during 2016 and 2017 in what he called an "economic shock" that would see the cost of borrowing increase.

    Speaking in May 2016, a month before the UK's referendum, Osborne claimed property investors were inserting so-called "Brexit clauses" in deals to allow them to pull out and offered economists a grave warning.

    "If we leave the European Union, there will be immediate economic shock that will hit financial markets. People will not know what the future looks like," Osborne told leaders at the G7 Summit in Japan.

    ​"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 the Treasury analysis shows that there would be a hit to the value of people's homes by at least 10 percent and up to 18 percent."

    Nearly three months after Brexit, any uncertainty about the housing market is supposedly over with the latest survey from the Royal Institution of Chartered Surveyors (RICS) suggesting that its members expect house prices to rise 3.3 percent a year on average for the next five years.

    ​It's one of the most confident housing market predictions since the referendum vote according to thisismoney.co.uk. But it's still lower than the prediction in January that house prices would rise by four percent a year.

    However, the UK's housing market did stagnate during August due to the shock of Brexit — but since settling down, it appears to be the same old reasons that are still contributing to the rise in house prices — and that's the lack of housing stock.

    "There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum," Simon Rubinson, RICS chief economist said.

    "Buyer enquiries did dip again in August but only modestly, and more significantly, sales expectations are beginning to edge upwards once again."

    The report published by RICS suggested that home sales would keep rising across the UK over the next year and that "an ongoing shortage of property for sale would keep prices propped up."

    Labeled the most confident house price survey since Brexit, the published results follow the questioning by MPs of the Governor of the Bank of England Mark Carney on whether he exaggerated his claims in the run up to the referendum that Britain's economy would suffer if the UK left the EU.


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    bubble, houses, affordable housing, property, housing, housing crisis, Marc Carney, George Osborne, United Kingdom, London
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