Fracking has no effects on house prices
From: Ken Cronin, Chief Executive, UK Onshore Oil & Gas.
I WANTED to respond to your recent article which stated that house prices will be devalued, and building insurance premiums will rise, as a result of hydraulic fracturing in Yorkshire. This will, naturally, concern your readers so let me offer reassurance to counter this speculation.
The Royal Institution of Chartered Surveyors has stated that there is no market evidence that shale gas exploration has had any effect on property values yet. Currently there are few sales of property in areas directly affected by fracking so there is little data on which valuers can draw and any commentary on any possible effects on property value would be very premature,
JLL, the international property consultancy, examined house prices in two areas in Lancashire where onshore gas exploration had taken place and stated that there was no clear evidence to suggest that onshore gas operations had a material impact on local house prices.
Third Energy has stated it will begin exploring for shale gas before the end of this year and it received planning permission in May 2016.
The property websites Zoopla and Prime Location show house prices around Kirby Misperton have risen three per cent over the last 12 months and in the Vale of Pickering prices have remained the same between 2016-17. This is reinforced by Rightmove’s data, which also shows a general upward trend in sold house prices.
The ABI, the trade association for the insurance industry, has said that damage as a result of earthquake, subsidence, heave and landslip are all covered, in general, under buildings insurance. There is, at present, little evidence to show a link between fracking and seismic activity that could cause damage to a well-maintained property. However, insurers will continue to monitor the potential for fracking, or similar explorations, to cause damage. The ABI is not aware of any claims where seismic activity, as a result of fracking, has been given as a cause for damage.
These comments have been reinforced by similar replies from insurance companies to the All Party Parliamentary Group organised by Kevin Hollinrake, MP for Thirsk and Malton. It should also be noted that, as is the case with other industries, our industry will also have adequate insurance cover.
Mention was made of a Defra report but there was no mention of subsequent comment from Defra that the document was drawn up as a draft internal discussion paper – that it was not analytically robust, had not been peer-reviewed and was incomplete. A Defra spokesperson said at the time: “It, (the report), does not contain any new data or evidence, and many of the conclusions amount to unsubstantiated conjecture, which do not represent the views of officials or ministers.”
Over 2,000 oil and gas wells have been drilled in this country and 200 of these have been hydraulically fracked.
There is no evidence of house price devaluation or higher insurance premiums in these areas.
In fact, there are wells in production in some of the most highly valued property areas in the country from Surrey to the Dorset coast and in North Yorkshire itself.
It should be noted that Third Energy has been producing gas for 30 years in North Yorkshire with no reported impacts of this nature.