Fracking bribes and house prices
Hot on the heels of Theresa May’s attempt to ignite the flare stack of public enthusiasm for fracking by offering householders bribes to accept it, comes an article from Mortgage Insider which fractures one of the main seams of her argument, releasing the very gas of truth into the air.
The article references a study by the University of Bristol, which suggests that concerns about fracking have led to a a decline in house prices of between 2.7% and 4.1% within a 30km radius of the area affected by the Preese Hall earth tremors.
The study attributes the effect to fear of earthquakes, but does acknowledge the possibility (or likelihood based on my own experience) that:
Another interpretation is that the earthquake raised people’s awareness of shale gas exploration and the potential risks – but only in proximity to the location where the incident happened.
Now the study concludes, based on it detailed analysis of house sale, and extrapolating to the housing stock in the local as a whole, that:
this gives us a cumulative loss that ranges between £706 million and £1.1 billion. These numbers are restricted to the license blocks where the earthquake happened.
Note that The Mortgage Insider article wrongly suggests that:
the report estimates fracking could wipe a maximum of between £706m and £1.1bn off house price values across all areas where exploration licenses have been granted
Mrs May is busily trying to persuade us that an industry with extraction costs roughly double their wholesale costs is somehow capable of delivering a Shale Wealth Fund “worth of up to £1 billion in total“.
How frustrating it must be for her to know that more than this amount has already been knocked off the valuation of houses in just the area around the Preese Hall site. And they haven’t really got started yet.