REPORT WARNS THAT HOME INFO PACKS WILL DAMAGE UK ECONOMY
Leading anti-home information pack (HIP) campaign group, SPLINTA, has welcomed the publication of an independent report into the potential economic impact following the proposed introduction of the pack in June 2007.
The report, commissioned from the highly respected ‘Oxford Economic Forecasting’ by GMAC-RFC, a leading mortgage lender, predicts the effect on the UK economy if 10% or 25% less property sales transactions take place in the years following 2007. The reduction in sales may come about as a result of sellers being unwilling to accept the liability to pay for a HIP (costing between £700 and £1000) before their properties are put up for sale. Industry experts warn that the reduction could actually be as high as 30%.
If there are 10% less transactions post-HIP the government will find itself facing a 2.3 BILLION pound shortfall in its revenues in 2009 and a shortfall of 3.2 BILLION pounds by 2016. If 25% less properties are sold the hole in the budget will grow to over 5.6 BILLION pounds. In both scenarios unemployment rates may rise.
Nick Salmon, head of SPLINTA said: “Experts in the property industry have been warning the government for years that the unintended consequences of HIPs could be disastrous. Not only will the pack fail to materially improve the home buying process, now we can see that the entire economy may suffer as a result of the government’s blind arrogance in pushing this measure through. The government and the HIP providers will attempt to spin their way out of the report findings but considering that Oxford Economic Forecasting is a highly respected independent body that does economic modelling for the Treasury, the World Bank and the International Monetary Fund their findings cannot be easily dismissed. It is time for Secretary of State, Ruth Kelly, to call the whole HIPs scheme in for a full review.”
Posted: 29th June 2006