Could fracking destroy the value of your home?
Fracking could slash tens of thousands of pounds off the value of your home. A survey of estate agents found that on average they expected it to take 10% off the value of properties. Some suggested it could destroy value by as much as 70%.
The researchers interviewed 60 estate agents in Lancashire, Manchester and Sussex - all areas where companies have applied to start extracting shale gas. It found that a quarter had already been asked about the risks of fracking by customers, and four of the agents said clients had pulled out of a sale because of fracking concerns.
Further proof
This study clearly comes with an agenda, as it was commissioned by Greenpeace. However, it is not the first to suggest that fracking could hurt house prices. Back in August last year the government published a report into the impact of fracking, which mentioned a 2010 report in Texas which found that houses valued at more than £1,500 within 1,000 feet of a well site saw their value fall between 3% and 14%. There was another study that showed that prices dropped between 4% and 7% for homes within 4km of sour gas wells and flaring oil batteries in Alberta Canada.
However, what particularly alarmed and upset campaigners, was that before this government report was released, three sections of the text regarding the effect on house prices were removed. Unsurprisingly, it has led to concerns as to whether there was anything more worrying regarding potential damage to house prices that the government chose not to disclose.
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Fracking
Fracking is a controversial technique for getting gas and oil from shale rock. A high-pressure water mixture is forced into the rock in order to release the gas inside. The rock is broken apart by the process - which is known as hydraulic fracturing - and has become known as fracking for short.
There are a number of environmental concerns that have been thrown up by widespread fracking in the US. First it uses an inordinate amount of water, which needs to be transported to the site. Second, the process releases chemicals that can cause cancer, and there are some concerns as to whether they could escape and pollute groundwater around the site. Finally, there are concerns that the process can cause small earth tremors.
Government backs fracking
However, there is also the chance to release more energy from the ground beneath the UK, and given the value to the UK economy, the government has decided that on balance, it's the best approach. David Cameron has said: "A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure. That's why we're going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country."
The government followed this in January this year with incentives to encourage local areas to support fracking. It announced that councils could keep 100% of business rates collected from shale gas sites - double the usual 50% figure. This, they said, could be worth £1.7 million for a typical site. It also said local communities would receive £100,000 when a test well is fracked, and a further 1% of revenues if shale gas is discovered. This could be worth between £5 million and £10 million over the lifetime of the site.
But what do you think? Would a fracking site put you off buying in the local area? Let us know in the comments.
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