With up to 65% of UK households in the firing line of fracking companies like Cuadrilla, Britons can expect over a £75 Billion write-off of property valuations.
Using previously censored content from the government’s own report by DEFRA on fracking’s impact on rural economies, TalkFracking.org have made the calculation, based on a £5.75 trillion value of UK residential homes (Savills 2015), which is 2.7 times to UK’s GDP.
If the average property price valuation slumps by just 2% across Fracking zones, that would wipe off an average of £75 billion from UK residential homes’ property valuations. Even if just 20% of the country was fracked, there would still be a £23 billion fall out.
Property expert Ray Boulger, from John Charcol comments: “Perception is everything in the property market and from the limited evidence already available it is clear that there will indeed be a negative impact on house price valuations in areas with the prospect of fracking happening.”
He says: “The prospect of fracking in your area is a bit like putting a motorway or railway, like HS2, through your front garden – it’s going to have an impact on the valuation of your property”.
Boulger adds: “A commercial business which engages in an activity which has a demonstrable effect on residential or other commercial property values should be required to compensate property owners affected in the same way as compensation is paid when this happens as a result of a new road or railway”.
Property valuation declines will vary overall based on proximity to a fracking well. For instance, house prices within 1 mile of fracking drilling could potentially fall by up to 4-7%, based on the Boxall (2005) et. al report if they were within 2.5 miles of wells.
In Lancashire, where the Council has just rejected fracking plans, some property owners have already seen 50-100% write-offs in value.
In the USA, Pennsylvania properties within 1.4 miles of wells, lost up to 12.9% of their value when the frackers arrived.
In the UK, if 5% was wiped off property valuations across the board, that’s a £287.5 Billion loss.
In the US, some mortgage providers have declined mortgages for houses in fracking zones altogether.
In addition to declining property valuations, homeowners in fracking zones are also likely to be hit with significant rises in their insurance premiums. The high risk of earthquakes from fracking will inevitably affect prices and medical insurance providers will undoubtedly consider the inhalation of Benzene in terms of premiums charged.
Legal actions are expected to be brought by homeowners in the UK against fracking companies. The Oklahoma State Supreme Court has decided that homeowners whose dwellings suffer damage due to fracking-related earthquakes can sue the companies responsible.
