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Power station property prices – homeowners are winning with wind farms but coal still causing problems

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The latest research by Springbok Properties has looked at the cost of living near to a major power plant when it comes to annual house price growth and how this differs depending on the type of energy facility.  

Despite the war against climate change, the go-ahead has been given for the first coal mine in decades and this could spell trouble for more than the environment, with local homeowners also in the firing line for a decline in property prices. 

The latest research by national fast sale agent, Springbok Properties, has looked at the property cost of living closeby to a major power station and how this impacts property prices and growth across different types of energy.

Springbok Properties looked at the areas home to the largest power stations across oil and diesel, natural gas, coal, nuclear, biomass and on-shore wind, comparing house prices surrounding each plant and the annual rate of growth compared to the wider area.

With these industries bringing employment and further demand for housing to each local area, the average house price surrounding all types of power plant were higher on average than the surrounding area, bar those living around a coal power station.

However, while the cost of homes may generally be higher, the cost of living close to a power station had varying impacts on house price growth depending on the type of energy that was being produced.

Winning with wind

The research shows that over the last year, those living close to one of the largest wind farms have seen their property price increase by 3.4%, while those in the wider surrounding area have seen an uplift of just 1.9%.  

Biomass power plants also seem to have stimulated the property markets surrounding them, with prices up 0.6% to just 0.4% in the wider region.  

However, when it comes to natural gas, local homeowners surrounding these power plants have seen their home increase in value on an annual basis, but at just 1.3%, this increase was lower than the 1.6% enjoyed across the wider area.  

Failing with fossil fuels

Things could be worse for those living close to a natural gas power plant, they could live by a nuclear, oil-diesel or coal plant.  

In the last year, property surrounding nuclear power plants has declined by -2.8% while the wider property market in these areas has crept up by 0.2%.

Homes in the immediate vicinity of oil-diesel power stations has dropped by -5% compared to an uplift of 1.5% in the wider market, while those living near coal-powered stations have experienced the largest decline of all, with property values down -9.9% annually compared to an increase of 3.5% in the wider area.

Founder and CEO of Springbok Properties, Shepherd Ncube, commented:

“It’s clear that our more traditional sources of energy such as coal, oil and diesel or nuclear energy are not only detrimental to the environment but the presence of such facilities can have a serious impact on the rate of growth in the local property market.  

While they do bring a large level of employment and demand for housing initially, the legacy is below-average growth and in many cases, a decline in property values compared to even the wider areas in which they are located. This is due to a number of factors including the aesthetic appeal of an area, the risk of added pollution and the ‘what if’ fear of something going wrong at the plant itself. It is, however, promising to see, that the greener energy outlets, like on-shore wind farms, don’t have the same detrimental impact on property prices and can supply sustainable energy without impacting the value of surrounding bricks and mortar.”

Power Station Type Average house price Annual Change
Wind £209,507 3.40%
Wider Surrounding Area £167,341 1.90%
     
Power Station Type Average house price Annual Change
Biomass £213,362 0.60%
Wider Surrounding Area £209,344 0.40%
     
Power Station Type Average house price Annual Change
Natural Gas £232,660 1.30%
Wider Surrounding Area £208,984 1.60%
     
Power Station Type Average house price Annual Change
Nuclear £195,946 -2.80%
Wider Surrounding Area £194,536 0.20%
     
Power Station Type Average house price Annual Change
Oil-Diesel Power Station £256,112 -5.00%
Wider Surrounding Area £252,643 1.50%
     
Power Station Type Average house price Annual Change
Coal £183,693 -9.90%
Wider Surrounding Area £188,876 3.50%

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Cost of maintaining a buy-to-let hits £12k a year in parts of the UK

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Leading property management platform, Howsy, has looked at the cost of maintaining a buy-to-let property each year and how this varies across the UK.  

Buy-to-let can be a tricky business if you don’t tackle it properly and there are a whole host of costs that can trip up the amateur investor. From the more obvious additional three percent stamp duty tax, to various other tax implications, void periods, mortgage costs, agency fees, the cost of finding a tenant, and more, Howsy’s previous research shows the average buy-to-let brings an annual return of just £2,000.

With the Government’s continued attack on UK landlords, making the most out of your investment financially can be tough and even when you consider all financial commitments for a property, many can still be caught unaware by out of the blue maintenance and repair costs. 

Buy-to-let landlords should squirrel away savings in anticipation of these events and an industry rule of thumb is an annual budget equivalent to 1% of your property’s value. 

So what does that equate to?  

Across the UK landlords should be tucking away an annual budget of £2,344 to cover repairs and maintenance, with this rising to £4,746 in London, with the North East home to the lowest repair costs at just £1,328. 

Of course, markets with higher rent returns may seem promising from an investment standpoint but the higher the reward, the higher the cost when things do go wrong. In Kensington and Chelsea, this annual 1% saving climbs to an eye-watering £12,292, hitting nearly £9,000 in both the Cities of London and Westminster.  

Outside of London, South Bucks and Elmbridge are home to the most expensive buy-to-let maintenance costs at £6,091 and £6,019 respectively.

Head to the likes of Burnley or Blaenau Gwent however, and this yearly maintenance budget drops to less than £1,000 a year.

Founder and CEO of Howsy, Calum Brannan, commented: 

“The buy-to-let sector can be a minefield for the amateur investor and now more than ever, it’s imperative that you do everything you can to maximise the return on your investment.

While technology now allows a greater level of control and service when managing your investment at a lower cost via online platforms, it isn’t just about the financial side of things. Providing a fit for purpose property is not only a legal requirement but essential to ensure a happy tenancy and a reduction in void periods.

Of course, things can go wrong and having the budget available to fix them is a must. In the worst-case scenarios, a cash pot equal to one percent of your property’s value might not be sufficient, but it should cover you for most eventualities and is a good benchmark to start on.

As with all buy-to-let investments, good preparation, organisation, and education are key, and whether you go it alone or have a great management agent if you stay on top of things, a bricks and mortar investment is still one of the best you can make.” 

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