OK, we know that the planners don’t take it into account, and that it isn’t considered by the Scottish Government. I wonder what the economists make of it? One possible answer is in the Report on the Economic Impact of Wind Farms on Scottish Tourism commissioned by the Scottish Government (some quotes and full report available for download here). It says (more or less) this: house prices don’t matter. Those who hate it move out, those that don’t mind move in. Fall in house prices doesn’t affect economy of the area, because those who occupy the now-cheap houses have more spending power because they aren’t paying so much for their mortgage. Hmmm. Well, that’s one way of looking at it. If you don’t believe me, here’s the full text (p. 86):
“On the question of value the evidence Is more ambiguous. Clearly people state they prefer scenery without intrusions such as wind farms and when asked to compare give small but significant negative values to wind farm developments. Empirically, however, these changes are so small relative to other socio-economic factors that they often cannot be directly identified in time series studies of property values. Over time the situation is also confused by sample selection bias; those who lose most will in time move out, those who object least will move in. Probably the best approach to reveal value loss is cross-section hedonic pricing analysis. The quoted study does provide some evidence of stated values being manifest in property prices, albeit without direct reference to wind farms. In terms of economic impact, changes in property values should have no effect on expenditure in the area*. However for transient visitors we would expect a change in value to be replicated in a change in accommodation price and a small negative impact on expenditure in an area.
*The impact on spending of wealth changes is central to modern macro-economics, increases in nominal wealth do induce increases in spending. However it is equally true that a decrease in house price to a new arrival in an area will divert expenditure from mortgage payments made outside an area to expenditure within.”
For those of us who are not deeply into cross-section hedonic pricing analysis and who know that the very real fall in the value of our properties could be catastrophic at a personal level, here are some links and documents:
A research paper by George Matthews FRICS; MIFireE on house prices and how they are reduced by wind farms (Word Document downloads):
Valuation Tribunal Council tax appeal from Jane Davis (2008)
The RICS study in 2004 concluded that 60% of the survey sampled suggested wind farms decrease the value of residential property where the development is within view and 67% of the sample indicated that the negative impact on property prices starts when a planning application to build a wind farm is made. Impact of wind farms on the value of residential property and agricultural land – an RICS survey (2004)
Wind turbine operators say that if there is a minimum distance between turbines and dwellings-a distance of 2 km, say-there would be very few areas in the United Kingdom where turbines could be sited.
An article about a landmark ruling in Australia on land values (word document download):
Value of land cut by wind
Article in the Telegraph about a wind farm developer who has withdrawn a leaflet claiming wind turbines do not affect house prices, following a complaint to the Advertising Standards Authority: click here to read more