Zoopla has forecast that house prices will fall 20% if there is a vote to leave in Thursday’s EU referendum.
Its prediction appeared in yesterday’s Mail on Sunday, which has been waging a fierce stay campaign – unlike its sister paper, the Daily Mail, which is pro-Brexit.
According to yesterday’s forecasts, Zoopla says that a Brexit would wipe out nearly all of the house price gains made over the last five years and leave some home owners in negative equity.
Zoopla says the average house price of just over £297,000 would fall by over £53,000 due to the combined effect of uncertainty, increased unemployment, reduced investment and higher borrowing costs.
Altogether, an out vote would cut £1.5trillion off the total value of the UK’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 home owners with less equity and some in negative equity territory’.
The Mail on Sunday does not say where Zoopla got its average house price of just over £297,000 from. The price seems closest to the latest LSL/Acadata price of £293,599.
However – although it seems to have gone largely unnoticed – last week’s new official house price survey has already sliced the best part of £100,000 off average house prices.
The ONS said average house prices in March were £292,000.
Last week, the new index, produced by the ONS and Land Registry, said that in April, average house prices were £209,000 – a huge plunge.
Analysts might have been equally surprised to note that this figure was an enormous monthly jump from the Land Registry’s average price of £189.901 for March.
Yesterday’s story in the Mail on Sunday featuring Zoopla’s forecasts quickly received hundreds of comments.
But many made it clear that far from dreading a fall in house prices, the public would welcome house price cuts.
One said: “Great. It’s about time prices went down.”
Another said: “Excellent – house prices are beyond stupid and getting worse. If leaving the EU gets them back to a more sensible level than that is another reason for voting to leave.”
Another comment was: “Just another scare story from the Remain camp. Get tired of all this cr*p now.”