UK housing market: the impact of Home Information Packs

Abstract

The government plan to make Home Information Packs (HIPs) a legal requirement when marketing a property from June 2007 has provoked much debate both in the House of Commons and the press in recent weeks. The scheme was subject to an eight month pilot in Bristol in 1999‐2000 and an impact assessment has been conducted. These, however, assess the scheme almost wholly within its own terms. This article, by Sam Moore, discusses the wider implications of HIPs on the UK economy. The higher cost of moving house is likely to have implications for the volume of house sales. Two scenarios have been modelled. The first considers the implications of a 25 percent fall in housing transactions and the second considers a 10 percent fall. The research considers the direct effect on consumer spending and the medium term unemployment rate and the subsequent knock on implications for the rest of the UK economy. In the "25 percent" scenario at its peak unemployment is over 90,000 higher than the base and GDP is down by half a percentage point. The most affected regions are those in the south of the country.