Property stigma: wind farms are just the latest fashion
| Date | 02 October 2007 |
| Published date | 02 October 2007 |
| DOI | https://doi.org/10.1108/14635780710829315 |
| Pages | 626-651 |
| Author | Sally Sims,Peter Dent |
| Subject Matter | Property management & built environment |
Property stigma: wind farms are
just the latest fashion
Sally Sims and Peter Dent
Department of Real Estate and Construction,
Oxford Brookes University, Oxford, UK
Abstract
Purpose – The Government’s aim to curb CO
2
emissions from energy production has resulted in the
growth of a new environmental feature; the wind turbine. Whilst this may help tackle climate change,
there is concern that the visual and aural presence of these turbines could have a negative impact on
house prices. Opinion studies undertaken within the UK appear to show significant variations in
attitudes towards wind farms in different locations (in particular between Scotland and southern
England) and at different stages during the development process. However, to date, no research has
established the actual impact on proximate house values. Therefore, the purpose of this study,
sponsored by the RICS, is to develop a methodology to measure the likely impact of onshore wind
farms on house prices in the UK.
Design/methodology/approach – This study focused on residential property surrounding two
wind farms in Cornwall. Transaction data for 1,052 house sales completed between 2000 and 2004
were obtained and analysed using regression modelling and comparative sales analysis. A second
study undertook an analysis of the planning objections to wind farms in this location.
Findings – The analysis of transaction data found some correlation between distance from a wind
farm, and value. However, the data were insufficiently detailed to draw any sound conclusions. The
analysis of planning objections revealed that 95 percent of objections came from people living outside
Cornwall.
Research limitations/implications – Whilst the methodology is sound, the available data were
limited to house type and selling price, and therefore not sufficiently detailed to highlight any small
changes in value.
Originality/value – The paper establishes general criteria which could be used to evaluate the
potential impact of onshore wind farms on property values.
Keywords Property finance,Residential property, Wind power, Windmills, Renewable energy,
United Kingdom
Paper type Research paper
Introduction
According to DEFRA (www.defra.gov.uk), there is growing scientific evidence that
manmade gas emissions (largely CO
2
) are having a noticeable effect on the earth’s
climate and it is predicted that over the next 100 years global temperatures could rise
by between 1.4-5.88C with devastating social, environmental and economic impacts.
Since the Kyoto Protocol, established in 1997, the UK government has been
committed to reducing greenhouse gases, in particular carbon dioxide (CO
2
) known to
be a major contributor to climate change (global warming). To facilitate this, the DTI
published the Energy White Paper in February 2003 (DTI, 2003) and set a “very
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-578X.htm
Winner of the the Appraisal Journal Prize for the Best Paper Presented on Real Estate Valuation
– Sponsored by the Appraisal Institute Educational Trust.
JPIF
25,6
626
Received July 2006
Accepted June 2007
Journal of Property Investment &
Finance
Vol. 25 No. 6, 2007
pp. 626-651
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635780710829315
ambitious goal” (Futterra, 2005) of reducing CO
2
emissions by 20 percent based on
1990 levels by the year 2010 (and a target of 60 percent by 2050) (www.dti.gov.uk). Part
of its strategy is to reduce CO
2
emissions from energy production (CO
2
is produced
when coal or gas is burnt and is a major contributor towards global warming) by
developing renewable energy production from sources such as wind, wave power, solar
energy and biomass fuel. They recommend that 20 percent of the UK’s electricity
should be generated from renewable sources by 2020.
Whilst there are a number of alternative renewable energy sources, the government
has focussed on wind power due to the abundance of suitably windy sites within the
UK (both on and off shore). The growth in this technology, whilst appearing to offer
many advantages, has raised public concern about the impact that the visual and aural
presence of turbines may have on property values, particularly since the number of
wind turbines sited around the UK continues to rise. The Green Party, in addition to
other action groups (see www.countryguardian.net for a list of action groups), have
voiced concerns that wind power is not efficient (Toke and Olivier, 2003) and suggest
that the “irreparable ecological damage, loss of amenity ... far outweigh any benefit”
and that their contribution towards electricity production in the UK is both
“insignificant and unreliable” (www.countryguardian.net/Manifesto.htm).
More recent concerns, however, have centred on the potential impact of wind
turbines on property values. This issue was recently highlighted in the media after a
compensation claim was successfully won by a buyer who had not been made aware of
the existence of planning permission for a wind turbine next to the home he had just
purchased (Clark, 2004).
There have been a number of opinion studies undertaken within the UK (Scottish
Executive, 2004) which appear to show significant variations between locations (in
particular between Scotland and southern England) and at different stages duri ng the
development process. To date, however, no research has established the actual impact
on proximate house values. This study, therefore, seeks to establish general criteria
which could be used to evaluate the potential impact of onshore wind farms on
property values through the use of a case study approach using a hedonic pricing
method in three particular locations within the UK.
Background
Government legislation
The Renewables Obligation for England and Wales and the equivalent for Scotland
came into force in 2002 as part of the Utilities Act 2000. This places a legal obligation
on all licensed electricity providers in England, Scotland and Wales (soon to be
followed by Northern Ireland) to produce evidence that they, or other electricity
suppliers linked to them, have generated a proportion of the electricity supplied to
consumers from renewable energy sources such as, biomass, fuel crops an d wind
energy. Suppliers are issued with a tradable “Renewables Obligation Certificate” (ROC)
for each megawatt hour of renewable energy produced, which they can then sell to
other suppliers who have not met their own renewable obligation.
In 2003 electricity providers were expected to supply a total of 3 percent of their
energy from renewable sources. The British Wind Energy Association (BWEA) state
that this figure is expected to rise to at least 15 percent by 2015, which will require
around 2,000 onshore turbines fitted with the latest turbo technology.
Property stigma:
wind farms
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