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News...

The Government’s plans to introduce compulsory HIPs on the 1st of June next year are now the subject of a concerted campaign of opposition led by the Conservative party.

 

The first salvos came in the form of a report published last month by Oxford Economic Forecasting (OFE) on behalf GMAC RFC, the UK’s 10th largest residential mortgage lender. According to OFE, Hips would distort the market, as Britons often put their homes on the market because they wanted to trade up to a bigger property or to gauge how much they could get from buyers. The cost of the HIP (up to £1,000 by some estimates) would stall people from doing this, resulting in a loss of sales.

 

The knock-on effect on the economy was analysed by the report under two scenarios – a 10% drop in sales,  and a 25% drop. In the first instance, OEF said in the two years following Hips' arrival unemployment would rise by 42,000, GDP would fall by £2.6bn, or 0.2%, and consumer spending would drop by £2.5bn, or 0.3%.

 

In the case of a 25% drop in sales, it predicted unemployment would rise by 93,000, with GDP dropping £5.7bn, or 0.5%, and consumer spending falling £5.8bn, or 0.7%. In both instances, the effect on the economy would be eased over the following five years.

 

On the 10th of July, the NAEA weighed in with it’s own research, which claims that most failed sales are not caused by problems the packs would tackle, such as surveys, but by broken property chains and gazumping. The trade body said its study revealed that while 30% of people had seen a sale fall through, only one in five of them had their problem caused by an unfavourable survey. Around 60% said a broken chain or higher offer from another buyer had thwarted their sale.

 

The NAEA said the study showed that the introduction of Hips next June would not speed up and simplify the homebuying process, as the Government claims.

 

Perhaps more seriously for the Government, the Daily Mail  gave over it’s front page to an attack on HIPs, and were quick to link them to the seemingly doomed deputy Prime Minister, John Prescott, claiming they were a “political iceberg that could further damage Labour”.

 

Following on from the Government’s apparent abandonment of it’s plans to merge regional police forces, and the doubts surrounding it’s intention to introduce compulsory ID cards, David Cameron and the Tories clearly scent blood, and have thrown their full weight behind those who oppose the introduction of the packs. They are using an Opposition Day debate in the House of Commons to show "profound concern" over the packs, and the Conservatives' campaign will also feature TV presenter Kirsty Allsopp of Channel 4's Location Location Location, along with the Tory housing spokesman Michael Gove.

 

 

Anti - Hips Onslaught Hots Up