The UK’s housing market has been through a roller coaster few years. A price peak in 2007 turned out to be a cliff edge. Prices may be recovering again after the years-long downturn, but there is a new threat on the horizon. And it’s not the base rate increase we’ve been expecting.
Fracking, the process of extracting natural gas and oil from the ground, is being touted as one way to diversify the UK’s dependence on imported LNG and crude. But it’s not without controversy.
After countless reports of fracking causing everything from earthquakes to taps spewing combustible gases in the USA, where fracking is much more widespread, we here in the UK have the benefit of hindsight.
It’s only sensible to assume that these same problems could manifect themselves here in the UK should fracking intensify. That’s exactly what should concern property investors around the country, and particularly in areas where fracking may be widespread.
There have been several reports already of fracking wiping thousands off the value of property around the country. What’s worrying to many is a secretive Whitewell report that has not been published in full may stoke fears that we could see a repeat of the price drops already seen stateside, where the report itself highlighted price drops of 3-14% depending on the property’s proximity to a well.
Fracking may be fantastic news for a whole host of companies (water treatment companies like Lagan Water could be in for a bonanza as it is feared the fracking process could unveil highly polluted water in places that could not be returned to the water system). However, any investor would be wise to consider the potential impact on valuation and resell viability should a fracking well be sited close by.
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