Amidst fear from respondents that the value of homes will be reduced significantly due to fracking in the Manchester, Lancashire and Sussex areas, we look into how it will affect the commercial property industry.
Fracking is the activity of drilling into the earth, which then, with a mixture of sand, water and chemicals, is injected into the rock below, releasing gases from it. Though it is big in the US for its high profitable outcome, fracking is extremely controversial for the negative environmental implications it could leave.
The worry comes from the cost of having to transport all of the water required, as well as chemicals possibly escaping and contaminating the surrounding areas.
It has already caused issues for some people, as a resident of Lancashire who lives near one of the sites, James Nesbit said to the Telegraph, that potential buyers were pulling out of deals for his home after reviewing the energy plans, adding “No one wants to commit to buying with the fracking shadow hanging over us”.
So how would this affect the commercial property industry? Currently, the UK National Farmers Union (NFU) are in uproar regarding the drilling, saying that it will cause huge financial difficulties for British farmers, especially with farmers whose mortgage is fixed to their land.
According to Dr Jonathan Scurlock, the renewable energy and climate change chief for the NFU, supermarkets may no longer want to purchase agricultural produce from the sites where the drilling takes place, he told the Telegraph.
He adds that the government don’t see the farming sector interest as an issue and just see it as an opportunity to produce profit, saying “some of that is a consequence of the appearance that government and industry are trying to brush rural economy concerns under the carpet”.
Prime Minister David Cameron and the Chancellor of the Exchequer George Osborne are saying that doing the gas extraction has the potential to decrease energy bills and enrich the UK economy, while some MPs are starting to see the concern.
Industrial estates near these sites could be affected as well, as contamination fears could put off potential buyers of property or even cause current occupiers to vacate. With Manchester being one of the major cities in the UK and a location where fracking is allowed, its economy may have a ripple affect and be severely tarnished.
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