The online estate agent said there could be ‘grave implications’ for the local economy and property market if the steelworks at Port Talbot closed its doors, with the plant acting as the driving force for the local economy while also being the main source of employment in the area. It estimates that in this scenario, house prices in the area could drop by 10% over the next 12 months.
Port Talbot is home to over 37,000 people, 11% of which work at Tata’s steelworks. Around £2.5bn of investment has been estimated to turn the plant into a profitable entity but the government is still struggling to find a buyer for the South Wales Plant, which is currently losing millions a week, according to BBC News.
Since Tata acquired the plant in 2007, the average house price in Port Talbot has surged by more than £10,000, to total an average of £103,000. However, eMoov.co.uk pointed out that uncertainty surrounding the steelworks’ future is already having an impact on house prices, dropping by as much as £4,000 in the last three months.
Founder and CEO of eMoov.co.uk, Russell Quirk, explained that the first signs of economic decline were usually visible in rising unemployment rates and the resulting drop in property values.
“When the local economy of an area relies so heavily on one specific industry to survive, the consequences of said industry disappearing all together can be catastrophic to the community,” he added.
Quirk said that Aberdeen, which is currently suffering declining oil prices, was experiencing a similar scenario with property demand almost non-existent, sending the average property price plummeting by £11,000.
“We’ve seen a similar decline over the last 18 months or so in Aberdeen, where the slump in oil prices has had a huge impact on the economy and property market in particular. However, the up and down nature of the oil market means Aberdeen has seen a slight uplift in demand during the start of 2016 and so things could be turning around,” he added.
“Unfortunately, there will be no such hope for those in Port Talbot should the steelworks shut and, although the area does have other economic outputs, the loss of Port Talbot’s economic cornerstone will be extremely hard, potentially impossible to overcome.”
