LMS slams GMAC-RFC’s report on HIPs

LMS has joined the government in slamming the GMAC-RFC report into the claimed economic impact of Home Information Packs saying that its conclusions are unsubstantiated, unrealistic and totally irresponsible.

The report claims that the introduction of HIPs could see unemployment rise by 93,000, Gross Domestic Product fall by 0.5% (5,700m), consumer spending fall by 0.7% (5,800m), and net revenue to the government fall by 0.9% (5,600m).

Dominic Toller, director of marketing and new business at LMS, says: A detailed reading of the report shows that these statistics have been arrived at on an assumption, plucked out of the air, that housing transactions will drop by 25% simply because of the introduction of HIPs.

Nowhere in the report, nor anywhere else that we are aware of, is there any justification for this claim.

It is an unsubstantiated, unrealistic and totally irresponsible exercise in playing with statistics to scare monger.

It should also be noted that, in the real world, although housing transactions fell by 17% last year employment actually increased over the same period so even the speculative modelling in this report is inaccurate.

Toller says that it is significant that the report is in two parts one a study by Oxford Economic Forecasting, which looks at the possible impact of 25 and 10% drops in housing transactions on the economy, the other a series of assertions by a Professor Mark Stephens that HIPs might, or might not, have these impacts on housing transactions.

Toller adds: At no time does Oxford Economic Forecasting make the prediction that such a thing might happen as a result of HIPs, but its name has been associated with this assumption – which is actually made by Stephens.

On page six of the report it has printed in black and white: Professor Mark Stephens has written the above analysis in a personal capacity and is in no way directly linked or employed by the Oxford Economic Forecasting organisation.

And on the question of the possible impact of HIPs Stephens says: we cannot be sure that transactions will fall and [speculative] sales are well short of the assumed falls in transactions of 10%.

So, someone says that he doesn’t know if the implementation of HIPs will reduce transaction levels, and then another organisation is asked to do some modelling, which ignores reality, based on substantial falls in transaction levels!

Quite frankly this makes as much sense as taking Theo Walcott to Germany.

Perhaps we should issue an equally unsubstantiated report stating that if the number of successful home transactions increases by 25% as a result of HIPs removing doubt and uncertainty for buyers there will be equally astonishing rises in employment, GDP, consumer spending and revenue to the Government!

The problem is that there is a great deal of misunderstanding and misinformation about HIPs at the moment.

In reality most of the costs of HIPs, such as searches etc, are already in the process and they will simply move from the buying to the selling end, so the implementation will actually be neutral to most home movers.

Any additional costs will be less than 0.2% of a typical house sale dwarfed by other costs such as Stamp Duty.

However, HIPs will help deter the speculative sellers who cause so much frustration and waste of time and money, while at the same time making transactions for genuine sellers and buyers easier, faster and more secure.

They will particularly benefit first-time buyers, and that has to be a good thing.

No wonder then that in the real world HIPs are widely supported by the Consumers Association and the general public.

Frankly this sort of research is, quite literally, incredible and should be despatched to the same place that you will find any England team sheet with Walcott’s name on it!