UK Foreign Secretary Philip Hammond has reaffirmed Chancellor George Osborne's claims that a vote to leave the European Union on 23 June would cause a significant fall in British house prices.

Osborne revealed the forecast on the short-term implications of Brexit earlier on Saturday.

The full report is due for publication next week and states that people's homes will lose up to 18 percent of their value if Britain leaves the EU compared to what they would be worth if the UK remains part of the 28-member bloc.

Speaking in south London on Saturday, Hammond said inflation and interest rates would rise in tandem with a price drop and that he thought the UK would struggle to manage so soon after a "very difficult" recession.

In contrast, former UK Work and Pensions Secretary Iain Duncan Smith - a senior campaigner to leave the EU - compared Osborne's claims to "Pinocchio."

Duncan Smith said that Treasury forecasts should not be trusted as they are often "manipulated" - something he claimed Osborne previously warned of himself.

UK Foreign Secretary Philip Hammond has reaffirmed Chancellor George Osborne's claims that a vote to leave the European Union on 23 June would cause a significant fall in British house prices.

Osborne revealed the forecast on the short-term implications of Brexit earlier on Saturday.

The full report is due for publication next week and states that people's homes will lose up to 18 percent of their value if Britain leaves the EU compared to what they would be worth if the UK remains part of the 28-member bloc.

Speaking in south London on Saturday, Hammond said inflation and interest rates would rise in tandem with a price drop and that he thought the UK would struggle to manage so soon after a "very difficult" recession.

In contrast, former UK Work and Pensions Secretary Iain Duncan Smith - a senior campaigner to leave the EU - compared Osborne's claims to "Pinocchio."

Duncan Smith said that Treasury forecasts should not be trusted as they are often "manipulated" - something he claimed Osborne previously warned of himself.

UK POOL

London - 21 May 2016

1. SOUNDBITE (English) Philip Hammond, UK Foreign Secretary and senior campaigner for the UK to remain in the European Union:

"House prices will go down (if the UK leaves the EU) as inflation and interest rates rise, and that's something people need to understand. The short-term shocks of a vote to leave on June 23 will hit this economy hard, and I'm not sure, a couple of years after a very difficult recession, I'm not sure we're strong enough to stand that again."

++BLACK FRAMES++

UK POOL

Lincoln - 21 May 2016

2. SOUNDBITE (English) Iain Duncan Smith, former UK Work and Pensions Secretary and senior campaigner for the UK's exit from the European Union:

++CONTAINS WHITE FRAMES++

"Well when I heard that I did think of Pinocchio and the nose growing rather long here (inferring that lies have been told). I mean, let me just remind everybody that it was the Treasury and George Osborne (UK Chancellor of the Exchequer) who said when we (the Conservative Party) came into power back in 2010 (that) we couldn't trust Treasury reports because they were always fiddled with by Chancellors of the Exchequer. (White frames). So my point is, very simply, (that) they do not know (that house prices will fall). This is a Treasury report - the Treasury didn't pick the recession when it came, the Treasury was unable to tell us back in November that actually we would have fewer tax receipts than we expected two months before. Don't believe forecasts. At the end, as the OBR (Office for Budget Responsibility) said, most forecasts are wrong."

Wyn Evans' family has worked this land in western Wales for 500 years, a hilly expanse of 200 green acres that looks out across the craggy Atlantic coastline.

He's been proud to carry on the tradition, grazing his 370 sheep and 80 cows on the rolling hills all his life.

Evans, 55, wants to have his son take over.

Despite what he describes as a 'glass half full' nature, he has his doubts.

"People are extremely worried," he said. "There is a very big lack of confidence in the industry at the moment."

Evans exports lamb and beef to the European Union, Britain's largest trading partner.

But his business, and that of many farmers in the UK, is under threat if Britain leaves the EU without a divorce agreement on March 29.

That's because if Britain leaves the EU without a deal, the nation will be outside existing trade agreements - a lonesome outsider with hat in hand hoping to get access until a deal is struck.

Exports to the EU would be subject to tariffs that would increase the price.

The now porous borders would become barriers where meat suppliers would need to show they are certified to ensure they meet EU standards.

Truck drivers would need to provide paperwork to prove things were in order.

About 30 percent of the lamb produced in the UK is exported.

Of those exports 90 percent goes to Europe - and very little European lamb comes to the UK.

If Britain crashes out without a deal, farm organisations say UK lamb will face an effective tariff of 46 percent while British beef will face rates of some 48 percent to 84 percent.

Even if no-deal never happens, the uncertainty that has been building over the two years since Britain voted to leave the EU has hit farmers hard, together with the communities that rely on them to get their sheep, cows and crops to market.

"People aren't spending money and reinvesting in their businesses," Evans said. "And there's only so long you can hold that off for. And people will need to invest in their businesses soon. We do need some security."

Estimates from the UKTPO (UK Trade Policy Observatory) suggested that some 600 jobs could go in a no-deal Brexit in Evans' county out of a population of about 73,000.

At the same time, there are fears Britain's government won't place tariffs on imports in order to keep a steady food supply.

That means that farmers would face a double whammy, having to deal with cheap imports while losing out to competitors on the Continent because of higher prices.

Then there's the potential for exports from places like the United States, which aren't allowed to import into the EU because of the use of hormones in raising the animals.

Another Welsh farmer, and National Farmers' Union (NFU) President for Wales, John Davies, worries that this would create "a race to the bottom and that is not acceptable."

"I don't think that's what the consumer wants and it certainly won't be good for British farming going forward," he said.

There's even a term for the potential chaos: Lambageddon.

"There will be British farmers out there lambing now with no guarantee about what market they will be selling into in three months' time, let alone a year or two down the line," the NFU said in a statement that stressed the troubles could extend through the whole food supply chain.

"With 70 percent of agricultural exports sent to the EU, this market is so important for our industry, which is why the NFU continues to call for free and frictionless trade in any Brexit agreement."

The farmer's union are not the only ones worried.

Food retailers in Britain are warning of higher prices for food as well as shortages in a starkly worded letter to lawmakers urging them to avoid leaving the European Union without a deal.

McDonald's, Sainsbury's and Waitrose were among those saying Monday they were "extremely concerned" about disruptions in the food supply chain, given that nearly one-third of the food Britons eat comes from the EU.

The industry says that "this complex, 'just in time' supply chain will be significantly disrupted in the event of no deal," and that there will be pressure on food prices from higher transport costs, currency devaluation and tariffs.

Brecon Beacons - 28 January 2019

1. Various of sheep on hillside

Ceredigion - 28 January 2019

2. Various of Wyn Evans, a sheep farmer and chairman of the National Farmers Union (NFU) Cymru Livestock Board shovelling hay in a barn full of sheep

3. Various of sheep

4. Various of the hills and fields with sheep on them that make up Evans' farm

5. Various of Evans talking on the phone

6. Sheep on hillside

7. SOUNDBITE (English) Wyn Evans, sheep farmer and chairman of NFU Cymru Livestock Board:

"Generally people are extremely worried. There is a very big lack of confidence in the industry at the moment, because, you know, I talk to machinery dealers, feed merchants they are finding farmers not willing to spend or reinvest in the businesses because farmers don't know exactly what's going to happen. But I can understand that, to lose that biggest market - and people do remember foot and mouth where we did lose access to the market - would be very worrying and very concerning for the industry, because we would see a huge financial hit."

8. Sheep on hillside

9. SOUNDBITE (English) Wyn Evans, Wyn Evans, sheep farmer and chairman of NFU Cymru Livestock Board:

"Well the uncertainty isn't helping industry at the moment because people aren't spending money and reinvesting in their businesses. And you know there's only so long you can hold that off for. And people will need to invest in their businesses soon. We do need some security. We do need to know that we will be able to trade with Europe. There will be opportunities down the line, many years down the line for us to do trade with other countries around the world on selling our produce into their markets, but you know our biggest volume market will always be the European market."

Brecon Beacons - 28 January 2019

10. Wide of sheep

Ceredigion - 28 January 2019

11. SOUNDBITE (English) Wyn Evans, Wyn Evans, sheep farmer and chairman of NFU Cymru Livestock Board:

"Well, I was an avid Remainer and I think the best deal is the one that we're currently in. But to do a good job of a really bad job then I think Theresa May's deal is the best deal for us."

ASSOCIATED PRESS - AP CLIENTS ONLY

Brecon Beacons - 28 January 2019

12. Sheep running across field

Ceredigion - 28 January 2019

13. SOUNDBITE (English) Wyn Evans, Wyn Evans, sheep farmer and chairman of NFU Cymru Livestock Board:

"So I would tell politicians they need to pull themselves together and they need to collaborate and they need to back a deal. It's vitally important that we get a deal. If we don't get a deal we will be onto WTO (World Trade Organisation) tariffs which will make it unviable for us to export lamb into the EU."

14. Various of village of Llanfihangel-y-Creuddyn and church

15. Various of Evans having tea at the home of his parents, Gwyn Evans, 85, and Buddig Evans, 81

16. SOUNDBITE (English) Gwyn Evans, former farmer and accountant, and father of Wyn:

"There wasn't enough talk throughout the country really, to talk about what was the consequences of leaving and what was the consequences to remain like. I think it wasn't dealt properly at the referendum stage to be honest with you. I think if a lot of the people knew today, that voted to get out of it, I think they would go back and remain on a second referendum. I think so."

Brecon Beacons - 28 January 2019

17. John Davies, farmer and National Farmers Union (NFU) Cymru President, walking alongside sheep

18. Sheep

19. Davies talking to his son Brychan who is on a vehicle with another worker and a dog

20. Sheep

21. SOUNDBITE (English) John Davies, farmer and NFU Cymru President :

"The European market is the best marketplace in the world. It has over 500 million of the richest consumers in the world and it's absolutely vital that we maintain access to that marketplace. It is on the same standard and protocols as what we presently produce. It is absolutely vital that we maintain those standards going forward and that we have access."

22. Davies with his son, another worker and dogs

23. SOUNDBITE (English) John Davies, farmer and NFU Cymru President:

"In Wales, food and farming is worth 7 billion pounds. That's the biggest part of the Welsh economy. Nearly 20 per cent of people in Wales are employed in food and farming. It is absolutely vital to the economy of Wales that we have a deal with the European Union, not just from the agricultural sector but from across industry."

24. Sheep

25. SOUNDBITE (English) John Davies, farmer and NFU Cymru President :

"We may see a situation where imports from all over the world produced to completely different environmental standards and completely different animal welfare standards, completely different antibiotics standards may be allowed to come in without any tariffs, so that's a race to the bottom and that is not acceptable. I don't think that's what the consumer wants and it certainly won't be good for British farming going forward."

26. Various of sheep being moved from field to field