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."