Fracking may negatively affect house prices due to concerns about seismic activity, reveals new research by the University of Bristol, the London School of Economics, and Duke University in North Carolina.
The researchers found that the two minor earthquakes linked to exploratory fracking near Blackpool in 2011 caused a 3-4 percent drop in local house prices.
The estimated total impact on prices adds up to a cost of £111-169 million for houses sold in the area that experienced the earthquakes, the report shows.
But as the study points out, this estimate is likely on the lower-end of the scale “since fear of fracking also devalues land and property that is not yet on the market.”
This report also supports the government’s own conclusions about the negative impact of fracking on housing prices. Last July a full version of the Department of Environment, Food and Rural Affairs’ ’Shale Gas Rural Economy Impacts’ report was released which revealed concerns about the link between shale gas extraction and property prices.
The Bristol study compared housing prices in areas affected by earthquakes of a similar magnitude to those in Blackpool but where no fracking took place. This showed that the effect on prices was not due to a general discomfort with the idea of seismic activity but is “more likely” an expression of fear about fracking.
As the researchers explained: “Fear of fracking may be directly related to the concerns about future seismic activity, but it may also reflect a rising awareness of the overall social costs of shale gas development.”
This echoes concerns raised by the Lancashire County Council last summer, such as impacts to road safety and water quality, when it rejected two planning applications for exploratory drilling by fracking company Cuadrilla.
As the report explains, in the United States, where there is commercial-scale fracking, the impacts to air and water, noise and light pollution, as well as increased road congestion, are of “genuine concern” to homeowners and buyers.
“This is because these costs are typically borne by nearby landowners and other stakeholders, but not by the drilling company.”
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