New controversy has been introduced into the Home Information Pack debate with research commissioned by GMAC-RFC, the UK's 10th largest lender. This research was given the remit of estimating the impact to the economy of a fall in property transactions by 10% and 25%. Using these parameters, Oxford Economic Forecasting (OEF), who are pre-eminent in this field, produced figures for the effect on GDP, consumer spending and unemployment.

Assuming a 10% reduction in property transactions, GDP will fall by 0.2%, consumer spending by 0.3% and unemployment will rise by 42,000.

Assuming a worse case of a 25% reduction in property transactions, GDP will fall by 0.5%, consumer spending by 0.7% and unemployment will rise by 93,000.

Sounds bad, but why have GMAC-RFC plucked these figures from the ether.

Stephen Knight of GMAC-RFC has admitted that this was a completely speculative exercise.

Pressed further he has also stated 'I cannot overstress that nobody is saying that these reductions will happen'.

'We're just making the point that nobody can guarantee that they won't'.

'For that reason it is useful to at least frame the economic impact'.

One cannot help but assume that GMAC-RFC are somewhat against the concept of Home Information Packs and would prefer the existing status quo.

They have not commissioned research to investigate the likely impact of Home Information Packs on transaction levels and one wonders why not.

The Department for Communities and local government (DCLG) has commented on the new research by saying ' 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'.

The DLCG has also pointed out that transactions fell by 17% last year and unemployment did not increase as a result, it actually fell slightly.

Our view?

The reporting of this type of research is a little one-dimensional and doesn't present a balanced argument.

Take for example, the latest SPLINTA press release headline 'Report Warns That Home Info Packs Will Damage UK Economy' or the Daily Mail article today stating 'a major report warns of the devastating knock-on effects on the government's controversial plans ranging from unemployment to soaring house prices.' Both these statements seem factually incorrect, regardless of your view on Hips.

We have always been ready to post news items that are critical of the Government's HIP policy, but have always tried to separate reasoned argument from the usual 'white noise' that accompanies any major change that so fundamentally affects so many vested interests.