View more on these topics

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

Recommended

Sub-prime deals from Pink

Pink Home Loans has launched a range of products aimed at clients with impaired credit histories. Funded by Platform, the products offer borrowers assistance with legal fees as well as free valuations. With purchase mortgages, clients will receive 200 cashback and free valuations while clients wanting to remortgage have the choice of free legals provided […]

Lenders, exit fees and excuses

It would be fun to see the reasons lenders give the FSA in response to its call for them to justify raising their exit fees, as there can’t be many good ones, says Drew Wotherspoon

Commissions tracking tool

Quay Software has introduced an automatic commissions module that allows IFAs to automate and track their commission.

Principality chairman retires

Peter Davies, chairman of Principality, is to retire from the board on June 2006 and will be succeeded by the deputy chairman David Williams.Davies has served as a non-executive director of the society since 1989 and has been chairman since 2000.During his tenure, assets broke through the 4bn landmark and the society received the National […]

Guarantees in the retirement income market

Lorna Blyth, Royal London  Do guarantees benefit customers and, if so, when? To answer this conundrum we commissioned Millimans, a global actuarial consulting firm, to conduct an independent review of the UK retirement income market and whether guarantees really do offer customers better value for money. The brief The study was one of the most comprehensive undertaken […]

Newsletter

News and expert analysis straight to your inbox

Sign up