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JOINING THE EURO WOULD RAISE HOUSE PRICES AND SLOW EXPANSION OF ASHFORD

20th June 2003

Ashford Borough house prices and costs of transactions would be very much increased if Britain joins the Euro. The increases could be so great that the planned expansion of Ashford would be stalled. The Royal Institute of Chartered Surveyors has predicted a general rise in house prices of 30% over three years if Britain joins the Euro (1). Ashford prices have consistently risen dramatically: 63% for 3 bedroomed houses 1998-2000 (2); and over 40% for all types of housing in the last year. Development is occurring at a rate slower than demand, creating scarcity and pushing up prices especially, as estate agents have said, of three bedroom family homes. The Barracks development is unlikely to start construction until mid-2004 and Cheesemans Green is even further off in time since Junction 10 would have to be adapted first. Steve Dawe comments:

"The Government would lose control of interest rates to the European Central Bank if we joined the Euro. Faced with a housing boom, as predicted by the Royal Institute of Chartered Surveyors, the risk of accelerating inflation would force the Government to use unpopular means to force prices down. It is looking at raising stamp duty and even at capital gains tax upon the sale of a property bought by first time buyers(3). Fixed rate mortgages over longer periods which the Government wants to prevent the problem of 1980s interest rate increases causing repossessions(4) mean higher interest rates for the security of the mortgage lending body: in case interest rates rise. This means higher transaction costs, forcing people not to sell, creating new scarcity. The Royal Institute of Chartered Surveyors therefore predicts a housing price boom followed by a 'bust' as the Government tries to control house price inflation. This could severely cripple the Government-imposed expansion of Ashford." ENDS c312 words

FURTHER INFORMATION: Steve Dawe, who is the Green Party's worker at the No Euro Campaign Office in London, and Press Officer of the East Kent Green Party:

01233 645167/07904 382203; 0207 378 0436 Mondays/Wednesdays.

Notes: 1. James Daley Euro entry would lead to housing boom, Sunday Telegraph, 8th June 2003; 2. www.ashford.gov.uk/pages/liv_wrk_fig_inf.jsp 3.From the Government's Fiscal Stabilisation and EMU Assessment; 4. From the Government's Housing Assessment: www.hm-treasury.gov.uk/documents/the_euro/assessement/euro_assess03_speech.cfm

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20th June 2005