LSE confirms wind farms affect house prices

nil value

Prof Gibbons of the London School of Economics ‘Spatial Economics Research Centre’ has confirmed that wind farms do affect the value of houses. The research was done over one million homes close to wind farms but at 11% it would seem to be quite low. However this is the problem with statistics. One would need to study the whole research and see whether there is a different figure relating to those closer and those more remote. From personal experience I am aware that many within close proximity from a wind farm or even just one turbine find it extremely difficult to persuade an estate agent to “take instruction”(offer to market) their property. This has much to do with waste of time and reducing the average sale rate of the agent. A figure much used to encourage sellers to place their property with any one agent. We are aware of rates of 25% more of suggested discounts from agents but the real horror is not even to find a buyer. We have all seen letters to sellers from agents telling them that when the client found out about the proposed wind farm, they pulled out. Some of these buyers originally expressed firm green credentials. Funny how quick they turn into nimbies the closer reality encroaches. Another problem is even if a seller finds a buyer at a discounted price, they often cannot afford to move as the difference between the cost of the new house and the value of the old is beyond their resources.

What the LSE report does though is totally trash the oft quoted RICS report, now challenged by the body itself(However even this is brought into doubt as RICS has released information that they cautioned use of the 2007 report as restricted in scope and outdated), that the Wind Industry regularly use to suggest no loss of value. Like usual the industry is talking TOSH. Perhaps every single approval that was passed by ignoring local property devaluation should be re-addressed and the body which approved, council or Scottish Government, should be sued for that loss of value. Now that would really put the cat among the pigeons! This is not something new to this blog but has been raised in the past.

However Prof Gibbons is not the only commentator on this and a Devon MP has come up with a figure of 33%

Wind farm ‘blight’ cutting value of homes by up to 33%, says MP
Exeter Express and Echo
30 December 2013

Westcountry homes close to wind farms have lost up to a third of their value, an MP has claimed as the Government considers paying compensation if developments cause a property price plunge.

Geoffrey Cox, Conservative MP for West Devon and Torridge, said constituents have been told by estate agents their homes are worth “significantly less” thanks to giant turbines, and that it is an “injustice” they lose out while developers and land owners potentially pocket millions.

This year, (2013) Mr Cox issued a blanket objection to all new commercial wind farms after proposals for scores of turbines have pushed parts of rural areas to “tipping point”.

Meanwhile, Planning Minister Nick Boles has proposed direct compensation for lost property value thanks to developments such as turbines, but also nuclear power stations, rail links and factories.

The minister is eyeing a pilot scheme in the coming months, and it could be based on the Dutch model that pays out an average of around £8,000 to householders that have suffered “detriment”.

Mr Cox said he welcomed the proposal, which is likely to curry favour across rural Cornwall, Devon and Somerset, where the growing number of wind farms are seen as a blight by residents.

The MP said: “An increasing number of people are coming to me with clear evidence that the value of their home is significantly less than what it otherwise would be were the wind farm not there.

“I’m seeing a minimum 10% to 15% reduction. Some are seeing a loss of one-third of the value. How can that be fair?

“How can it be right that landowners and developers are making millions of pounds, while the ordinary household is losing the value of what is their pension, or nest egg in old age.” Of the minister’s proposal, he said: “I would completely support households having to be paid compensation for the depreciation of their house value as a result of wind turbines.

“It is simple nonsense for the pro-wind lobby to say they have no effect on house prices.”

But he warned: “The devil will be in the detail. How would you differentiate between those that are entitled and those that are not?”

The compensation package was revealed quietly in December’s autumn statement, but was detailed by Mr Boles when her appeared before the Local Government Select Committee of MPs.

He said the proposal was a “radical departure” from Britain’s current planning rules, but would help speed up major infrastructure that will boost growth, and would bring “individual benefits” for local residents from new development.

His idea goes beyond existing schemes to compensate homeowners for roads and rail links which affect the property by creating noise and traffic.

Mr Boles said: “I think that everybody recognises that countries have to do difficult things – build roads, build railway lines, build nuclear power stations and other kinds of power sources.

“It is better for everyone that the amount of money is banged up in the transaction process – making the decision, let alone building the thing, as little as possible and relatively speedy. With certain projects there has been a principle established of some kind of a benefit being paid to very local communities.”

He added: “One of the things we are keen to pilot is whether people who have properties very close to a substantial development might benefit from some form of compensation for the loss of property value, something that does happen in some other countries, the Netherlands have innovated with it.”

“It’s quite a radical departure for this country – it’s not totally clear how you graft it on to our planning system so that’s why we’re going relatively carefully into it and looking to set up a pilot to see whether it can help people overcome their objections to developments that are of benefit to the local community but might have a negative impact on them personally.”

A report last year from The Infrastructure Forum, recommending such a scheme in the UK, estimated it would cost £80 million a year but the costs would be far outstripped by infrastructure benefits.

 

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About Dougal Quixote

Slightly mad. Always believes a cup is half full so continues to tilt at Wind Turbines and the politicians that seem to believe it is their god given right to ruin Scotland for a pot of fool's gold.
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