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  • Property Prices

    Impact of shale fracking on property prices in the U.K.

    The increase of shale fracking in the U.K. is causing concern for environmentalists and NIMBY's, but should property investors also be concerned?

    MSN reported only yesterday that, in the U.S., mortgage lenders are becoming more cautious about approving loans for properties near fracking sites. Lawyers, real estate agents, public officials and environmentalists have noted that banks and federal agencies are revisiting their lending policies to account for the potential impact of drilling on property values. In some cases they are refusing to finance property with or even near drilling activity.

    Could the same happen here?

    One surveyor has warned that house prices close to fracking sites could drop by up to 30%.

    Valunation managing director Alison Beech commented on Mortgage Solutions that, while it was difficult to measure the actual impact of fracking, there were worries about tremors and possible water pollution (as happened at a fracking site near Blackpool).

    She said: “Despite the wide publicity and protests, it is just too early to gauge any adverse effects on house prices or demand, but it is obviously vital for surveyors in affected areas to be alert to any market reaction.

    “For the time being, it is important not to over react but surveyor reports should offer an appropriate comment in localities where this could assume greater importance.
    There does not yet seem to be any information regarding the geographical extent of possible physical effects.”

    Even in the absence of physical damage, public worries about fracking could have a knock-on effect on mortgage valuations, she added.

    Here is an overview of where shale fracking is currently happening, and could happen in the U.K.:

    [Image: screen-shot-2013-08-20-at-174741png_500x308.jpg]

    [Image: table_shaleplanning_549x318.jpg]

    Source: Could your town be the next Balcombe?

    On the flip side, fracking might improve local infrastructure, and increase economic activity, which could have a positive impact on house prices.

    [Image: house.png]Related content:

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    Can a surveyor be influenced?
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    What is the definition of 'close to a fracking site"? In many places in the USA where there is fracking there is also existing oil fields and maybe producing wells.

    For the USA, if you are really close you might be earning more from the mineral rights than any drop in property value will cost you. No idea how mineral rights in the UK work.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month. 11 years and running. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: AskJohn.AcuityScheduling.com to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    (22-08-2013 04:53 PM)john_corey Wrote:  No idea how mineral rights in the UK work.

    It is most unlikely that in the UK a house owner will own the mineral rights under their home. Even if they did, the value of these rights would be low given how small most gardens are.
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    Mmm, this is something that I had not considered. Maybe even the insurance companies could refuse to insure similar to high flood risk area's.

    On the positive side maybe there could be some buying opportunities if house prices do fall as a result of fracking.
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    (22-08-2013 05:01 PM)TrevOfHucknall Wrote:  Mmm, this is something that I had not considered. Maybe even the insurance companies could refuse to insure similar to high flood risk area's.

    On the positive side maybe there could be some buying opportunities if house prices do fall as a result of fracking.

    Correct on both accounts. When there is volatility, there can be risks and opportunities.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month. 11 years and running. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: AskJohn.AcuityScheduling.com to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    The fear factor will play its role just like with HS2. Some people will be so close the impact will be devastating yet they will just fall outside any compensation scheme.

    Distance i.e.' nearby' is all relative. I know people in the US who live 1.5-2 hrs drive from oil fields where they work, fracking is underway there too. Say they live approx. 100miles away. In the UK that would be 10miles away!
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    Ministers are reportedly reviewing laws that would allow fracking to be carried out underneath houses without the permission of the owners.

    Trespass laws are being examined to pave the way for energy companies to explore for shale gas.

    Operators need to ask homeowners before they drill under their land but can turn to the law to appeal if an agreement cannot be reached.

    The Department of Energy and Climate Change (Decc) is now reviewing whether the system, which can result in lengthy delays and costly court battles, is "fit for purpose". A consultation is expected to be published shortly.

    Full story from The Independent
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    News from Greenpeace:

    Great news! A big fracking company, Celtique Energie, has announced it will scale back plans to drill in Fernhurst, a town in the beautiful South Downs.

    This leap forward comes after huge public pressure, including thousands of us signing up to a 'legal blockade' to refuse to permit fracking companies to drill under our homes.

    But the battle isn't over. Other towns across the UK are still at risk. And even in Fernhurst, Celtique Energie are banking on David Cameron’s rumoured plan to change the law and allow drilling without permission.

    We can stop this – if we show Cameron he will face a huge backlash if he tries to push ahead.

    Sign the petition >>> here.
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    How is that great news?

    Fracking will be a good thing, thousands of jobs created, energy prices brought down, less reliance on importing from Russia and Middle East corrupt regimes.

    It's been a revolution in the USA and we should embrace it as progress over here, rather than taking a NIMBY attitude.
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    People with fracking going on in their area have found that they cannot sell their properties.

    Also, the process flares hydrochloric acid into the atmosphere!

    That might have something to do with the NIMBY attitude. Smile
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    [Image: 4995468760_6be86655d4_t.jpg]
    general operations director (aka Colonel Nicaffi) - propertytribes.com

    True, but that just mean the process needs refining, not abolishing!

    Always too many obstacles to progress in this country.

    As for Greenpeace, hopefully they'll all sink on one of their protest boats, they make me want to change careers and become a pirate just so I could sink them with a canon. Silly people.
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