Wind farms could decrease property values by 12%, says LSE

Giant wind farms could be decreasing nearby property prices by as much as 12%, extending to a 14km radius, according to research unveiled by the London School of Economics. 
The LSEís study found that properties within a 2km radius of a wind farm have been typically been sold for 12% lower than their actual valuation, though houses as far away as 14km are estimated to have been adversely affected in recent times. 
 
The studyís findings display a contrary conclusion to the one derived by the Centre for Economics and Business Research released last month, which stated that no householdís property value had been affected by wind turbines within a 5km radius. 
They study will crank up the pressure on wind farm owners to grant compensation to property owners when permission to build a new farm near their house is given, with the latter likely to use the data as clear evidence that they should be given financial payment to cover the reduction in their homes value.
At present, wind farm owners are only required to pay rent on the land that they use, though they do often make donations to community initiatives as a gesture of good faith. Nevertheless, they are not legally required to compensate property owners for externally diminishing their homes value, and the LSEís findings will likely be used in order for affected householdís to make a new push to have legal protection introduced. 
ëQuite substantialí
The “Gone with the wind: valuing the visual impacts of wind turbines through house prices” report, written by Professor Stephen Gibbons, argued that “wind farm developments reduce prices in locations where the turbines are visible, relative to where they are not visible, and that the effects are causal”.
For standard wind farms, this means a property valuation decrease of about 5-6% for houses within a 2km vicinity of the turbines, though this falls to a substantially lower 2% for houses between 2-4km. 
Houses further than 8km away were relatively unaffected by the presence of a wind farm nearby, with the study revealing that valuations dropped by close to 0%.
However, the greatest problem highlighted by the report was with large wind farms, which were identified as having the 
sharpest negative effect on properties within its area. 
“As might be expected, large visible wind farms have much bigger impacts that extend over a wider area,” said 
Gibbons. 
“The largest wind farms reduce prices by 12% within 2km, and reduce prices by small amounts right out to 14km (as much as 1.5%).”
Gibbons argued that the current stigma around wind farm visibility meant that operators would have to cough up a great deal of money in order to compensate homeowners in the area, as the implied costs that a potential buyer would pay to avoid a farm would make the final compensatory figure substantially higher than would be expected. 
“The implied costs are quite substantial. For example, a household would be willing to pay around £600 per year to avoid having a wind farm of small to average size visible within 2km, around £1,000 to avoid a large wind farm visible at that distance and around £125 per year to avoid having a large wind farm visible in the 8-14km range. The implied amounts required per wind farm to compensate households for their loss of visual amenities is therefore fairly large: about £14m on average to compensate households within 4km.”
The LSEís findings are contrary to a separate report released by the Centre for Economics and Business Research last month on behalf of Renewable UK, which evaluated site wind farm areas across England and Wales and conversely concluded that no adverse affects had been incurred on the prices of homes that were within a 5km vicinity of a wind farm. 
Maf Smith, deputy chief executive at RenewableUK, said: “This is an interesting contribution to the existing literature, and varying conclusions are being drawn from the work. Most pieces of work so far have found that it’s difficult to discern any effect one way or another.
“Our own independent study demonstrates that wind farms have not affected house prices, and we did this by taking a deep dive into real house price data around seven wind farms across England and Wales.
“The LSE study tests for the influence of wind farms in a different way. It covers a shorter period rather than looking at the whole lifecycle of the project. It measures only from a central point at each wind farm site rather than taking into account every single turbine at the very edges of the development. It makes necessarily simple assumptions about visibility, when we know that in reality many sites will be hidden by nearby buildings, trees and the local landscape. 
We’re grateful that the professor states that his work is not conclusive. It helps to explain why his findings don’t accord with previous research that the CEBR, RICS and others have done.”
The issue of property valuation falls at the hands of wind farms has been an area of huge contention in recent times, with a number of campaign groups forming in order to back an initiative to introduce compulsory compensation for households in visible vicinity of any turbines. 
And campaigners have heralded the LSEís study as the final and vital piece of evidence required for them to make a push to receive compensation from wind farms, and even the closure of a number of them. 
George Matthews, a member of a Scottish campaign group, said: “We now have conclusive proof at last produced by a professional, trustworthy, honest and independent professional source stating categorically that turbines reduce house values, which totally contradicts the CEBR report.”

 

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