Will nuclear construction power up house prices?

October 4, 2021 / Isla MacFarlane
Will nuclear construction power up house prices?

House prices in Essex and Suffolk could see dramatic increases in the next few years as demand for housing increases around the proposed construction sites of Bradwell B in Essex, and Sizewell C nuclear power station in Suffolk. But the picture isn’t as simple as it first seems, with a short-term and long-term impact on house prices in the vicinity of the completed power stations.

Robert Burdett, MD at James Leigh Property Management said: “With construction set to begin in the next five years or so, pressure on housing stocks will increase as the construction phase nears. Workers at all levels will need to move into the area. That means that house prices are likely to rise close to the construction sites, at least in the short term, as sellers are able to command higher prices.

“In the longer term, it is unlikely that this price increase is sustainable as not all of the workers needed for the construction stage will stay in the area, and in fact, house prices could fall. At the very least prices could rise at a slower rate than homes in the wider region.”

Not only will house prices be impacted though. The rental market will enjoy a period of buoyancy leading up to the construction phase, with early investors potentially enjoying good rental yields. Renting to people known to be employed in the construction of the power stations also offers stability and certainty. For seasoned investors, this could be an opportunity to increase their property portfolio. And for first-time investors, strong rental yields early on could provide a solid early return on investment.

Robert Burdett said, “Where large numbers of people come into an area thanks to investment and regeneration there is always a requirement for quality rental properties. For those workers involved in the construction phase and not moving to the area permanently, renting a property is often the solution to their housing needs. As a result, rental yields will respond to pressure on the market, so buy to let is an attractive investment opportunity for savvy investors.”

According to figures released by the Nuclear Industry Association, the nuclear power sector employs around 61,000 people in the UK, including nearly 2,000 apprentices and a further 900 in graduate schemes. It is estimated that Sizewell C will employ 900 people once the power station has been built, with around 25,000 people employed during the construction phase. The power station will provide around 7% of the UK’s power, enough power for 6 million homes.

Bradwell B will employ similar numbers when completed, and the developers estimate that 9100 people will be employed on the construction site at any one time. 3000 of these would be employed from the local and regional workforce.

Burdett said, “The anticipated employment figures show clearly that for both sites there will be a significant housing need during the construction phase, and an ongoing requirement for permanent employees. Bradwell-on-Sea and the Suffolk coast are both areas with relatively low housing stock. What is complicated for both areas is the difference in employment requirement both in terms of numbers and required skills between the construction phase and when the power stations become operational. So house prices will certainly rise nearby, but to fulfill the need for homes, house prices could be impacted at a regional level as well.”

Skilled workers employed at the power stations command good salaries due to their particular skills, so the standard of living around nuclear power stations is known to be high. And that’s also good for the local economy because workers have higher disposable incomes.

But there remains some nervousness about living near a nuclear power station, even though the risk of accident in modern power stations is very low. And nuclear power stations have very low emissions, on a par with wind power. In fact, the Nuclear Industry Association reports that nuclear power stations have saved 2.3 billion tonnes of carbon dioxide since 1958 and that means a lower carbon footprint than coal, oil and gas power stations, and even solar power.

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