Chancellor George Osborne has claimed that property prices in the UK could fall by almost a fifth if Britain were to leave the EU.

Speaking at the G7 summit in Japan last week, Osborne said: ‘If we leave the European Union, there will be an immediate economic shock that will hit financial markets. People will not know what the future looks like.

‘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% and up to 18%.’

His comments are just the latest of many warnings from the government as they attempt to persuade voters to remain in Europe, but is he correct?

Certainly the ‘out’ brigade don’t agree. Andrea Leadsom, a minister in the energy department who supports leaving the EU, said: ‘This is an extraordinary claim and I’m amazed that treasury civil servants would be prepared to make it.

‘The truth is that the greatest threat to the economy is the perilous state of the Euro; staying in the EU means locking ourselves to a currency zone – which Mervyn King, ex Governor of the Bank of England, has rightly warned ‘could explode’.’

Although a slight slowdown in transactions and property price growth is being experienced at the moment due to uncertainty as the referendum draws near, this is natural and to be expected in the same way as normally happens around general elections.

According to research firm Capital Economics an ‘out’ vote is likely to have little impact on the UK property market.

Hansen Lu, a property economist at Capital Economics, said: ‘Altogether, uncertainty in the short term might lead to a small drop in transactions and a slight easing in house price growth, but we think the prospect of Brexit driving a collapse in prices is slim. Rather, with prices very high compared to incomes, and being propped up by a shortage of homes for sale, a recession and rising unemployment that drove up the number of forced sellers and cooled buyer demand is probably the biggest risk.

‘Yet, for now, there are few signs that a recession is imminent. As a result, rather than a nominal fall in house prices, we think any adjustment will be in real terms over the next few years, with wages rising alongside, or a little faster than, house prices.’

In answer to the chancellor’s other claim that mortgage rates would go up and mortgages become more difficult to get, Lu also said that a sudden and drastic hike in interest rates by Bank of England policymakers if a vote for Brexit sent sterling plunging is a remote prospect because they have already said any raises will be incremental.

Moreover, mortgage rules force lenders to test borrowers’ ability to cope with a 3% rate hike, an extreme scenario, before any debt is signed off – meaning consumers would probably withstand any interest rates shock.

The latest Knight Frank and Markit Economics House Price Sentiment Index also showed strong confidence in the UK housing market from property owners.

Gráinne Gilmore, head of UK residential research at Knight Frank, commented: ‘The steadiness of the headline house price sentiment index during such political uncertainty over the EU is a reflection that the fundamentals of the market remain unchanged – there is still an imbalance between demand and supply of housing, and for those with access to deposit payments, mortgage rates are still near record lows.’

London has been highlighted as the main area where property prices would be hit by a Brexit, but will it really suffer that much?

Certainly London property prices have long been supported by international investors with nearly half of all Prime Central London purchases made by foreign buyers, but how much of that is down to the EU can be questioned as only 16.5 per cent of buyers were from EU countries.

EU nationals may lose the automatic right to work in the UK, but if they are financially capable of buying London property and contributing to the economy why would they be asked to leave?

London is and will remain one of the key capitals of the world and remain an attractive place to buy property, be it to reside in or for investment purposes.

The truth is that nobody actually knows what the effect would be of a Brexit, or indeed the effect of a vote to remain within an increasingly unstable EU. We will just have to wait and see on the 24th.