Average house price of £297,000 would plunge by £53,000
In the latest warning of the economic risks of Brexit, Zoopla said nearly all of the gains made by the housing market over the past five years would be wiped out if the country votes to Leave.
Zoopla said the current average house price of just over £297,000 would plunge by over £53,000 due to the combined effect of ‘uncertainty, increased unemployment, reduced investment and higher borrowing costs’.
It would return house prices to levels last seen in 2011, in the wake of the global economic crisis.
Echoing Chancellor George Osborne’s dire predictions of the impact of Brexit, said an Out vote could cut £1.5 trillion from the total value of the country’s housing stock. In London, Zoopla puts average home prices at £671,989. It said this would fall to £550,989, while across the South East there would be a drop from £396,682 to £325,282.
Even in the area with lowest house prices – Yorkshire and Humber – the average would fall from £167,023 to £137,023.
Zoopla says its number-crunching, which is based on Treasury projections, implies that ‘most of the gains clawed back since the credit crisis would be wiped out… leaving homeowners with less equity and some in negative equity territory’.
Its intervention comes just days after senior Tories, including former Chancellors Lord Lamont and Lord Lawson, accused the Bank of England and the Treasury of ‘peddling phoney forecasts’ to scare people into voting to stay in.
The pro-Brexit campaigners accused Mr Osborne of ‘desperation’ for threatening spending cuts and tax rises after a Leave vote, and said there had been ‘startling dishonesty in the economic debate’. A Zoopla spokesman said: ‘While the economic impact of the referendum is hard to predict, it is clear that uncertainty is not good for markets.
‘The prolonged uncertainty following a Leave vote would likely be negative for the property market, with… the average homeowner between £29,800 and £53,600 worse off, and with property values returning to levels last seen following the credit crunch.’