DCLG slams GMAC-RFC HIPs report as “absurd”

The Department for Communities and Local Government has slated the findings of an independent study commissioned by GMAC-RFC into the economic impact of Home Information Packs as absurd.

The study, carried out by Oxford Economic Forecasting, looks at the economic impact of a 10% and 25% fall in housing transactions arising from the imposition of a compulsory HIP charge.

In the 25% scenario, it found that unemployment would rise by 93,000, gross domestic product falls by 0.5% or 5,700m, consumer spending falls by 0.7% or 5,800m, and net revenue to the government falls by 0.9% or 5,600m.

In the 10% scenario, unemployment rises by 42,000, GDP falls by 0.2% or 2,600m, consumer spending falls by 0.3% or 2,500m, and net revenue to the government falls by 0.4% or 3,200m.

However a spokesperson for the DCLG says: This report reaches absurd conclusions based on unfounded assumptions. The idea that the introduction of HIPs will increase unemployment by 93,000 is simply nonsense.

In Denmark, the number of transactions increased when HIPs were introduced,
rather than fell in the year after HIPs were introduced. The reality is that the level of sales depends on much wider issues in the housing market and wider economy that change over time, such as interest rates and earnings.

It points out that last year transactions fell by 17%, and unemployment did not increase as a result, it actually fell slightly