New research into the economic impact that the introduction of Home Information Packs (Hips) will have on the housing market revealed unemployment will rise and GDP along with net revenue to the government will fall.

Legislation introduced in June this year requires homeowners to provide prospective homebuyers with a pack – estimated to cost up to £1,000 – containing important information on a property such as building regulations and home condition reports.

A study commissioned by mortgage lender GMAC-RFC considered two scenarios for Hips; firstly a ten per cent reduction in housing transactions in the first year following the introduction of the packs, and, secondly, a 25 per cent reduction.

In the worst case scenario, Hips could potentially lead to a £5.7bn loss in the UK economy and make almost 100,000 people jobless in the first year of their introduction.

Ray Boulger, from independent mortgage broker John Charcol, said that most people believe transactions will fall following the introduction of Hips but it is hard to say to what extend because of a lack of proper research by the government.

"Everybody accepts that 'speculative' sellers [sellers who put their house on the market to test the water] will be less likely to put their property on the market. As for committed sellers, if you are really committed, you are going to have to pay upfront for a Hip," he said.

"A lot of the moves are aspirational where people can afford a bigger property. So those sorts of move that probably will be the most affected by Hips because they would be less prepared to spend £1,000 to buy a HIP, on the basis that they might end up not selling the property."