Home Information Packs could slash GDP by £5.7bn, according to fresh research.

Research conducted by GMAC-RFC considered what the effect of a 25% and 10% drop in housing transactions would have. GMAC-RFC suggest that a 25% drop, would cause unemployment to rise by 93,000, GDP to fall by 0.5% or £5.7bn, consumer spending to fall by 0.7% or £5.8bn and net revenue to the Government to falls by 0.9% or £5.6bn.

In the 10% scenario, unemployment would rise by 42,000, GDP fall by 0.2% or £2.6bn, consumer spending would fall by 0.3% or £2.5bn, while net revenue to the Government would fall by 0.4% or £3.2bn.

GMAC-RFC director of marketing Jeff Knight says: "We commissioned this work because, although there has been a lot of debate about HIPs, no modelling has been undertaken in the public domain to test the economic impact of HIPs if there were to be a fall in housing transactions. This work fills that gap and frames the economic risks.

“The results reinforce our belief that a paid-for HIPS dry run should be conducted so that the issue of consumer reaction to this new cost can be tested and taken into account prior to implementation."