Do local crime rates have an effect on demand for property and average house prices?
Local crime rates affect demand for property and dictate average property prices in a neighbourhood, some are within the control of homeowners, but most are completely out of any individual’s control. Not surprisingly, no one would choose to buy a home in a crime-ridden area even considering the impact on house values. Until recently, it was relatively difficult to assess crime figures in a particular area; however, it is now simply a matter of logging on to the local police force’s crime map. Homebuyers now have detailed crime statistics at their fingertips, and they are using them to make purchasing judgements on specific neighbourhoods. The unfortunate result is falling average property prices in severely affected areas.
What the experts say about local crime rates and average home prices
While there is already a lot of anecdotal evidence suggesting that local crime rates intrinsically link to average house prices in the UK, the Royal Institution of Chartered Surveyors (RICS) is worried that publishing figures in this way could have an unnecessarily detrimental effect on property prices. RICS are concerned that this freely available information will have a similar effect that hospital and school league tables have had on local house sale prices.
The Home Office has committed to making public statistics relating to burglary, street robbery, vehicle crime and anti-social behaviour – in very specific neighbourhoods. Contrary to RICS, the Home Office claims that there is no proven link between published crime figures and house prices. However, high levels of recorded crime will affect demand for private housing in affected areas, and that will inevitably lead to lower property prices.
What can be done to counteract the effect crime has on house prices?
Unfortunately, there is little existing homeowners can do to negate the effect that local crime rates have on the value of property. However, The Home Office recommends vigilance and the setting up of neighbourhood watch schemes as ways of bringing down local crime rates. Unfortunately, though, areas that develop reputations for crime can remain tarnished long after they have been made safer.
Buying a home is a huge investment for most people, and particularly in the current economic climate, buyers will usually go to enormous lengths to ensure the home they choose is perfect. That can mean investigating local facilities, transport links, school performance and crime rates. The ability to check Zoopla home prices also empowers buyers in their search for property, and the results are reduced demand in areas with high crime and lower-than-average sold prices.
For homeowners who need to sell their property quickly, living in an area synonymous with a crime can force them to accept offers way below what the property should be worth. Installing security features and making life as difficult as possible for criminals may help homeowners to find buyers more quickly, but such improvements are unlikely to affect sold prices significantly.
Is there evidence to prove a link between crime and average property values?
Finding definitive proof of the link between local crime rates and property values is difficult, as deprived neighbourhoods often already suffer from lower-than-average house prices. However, a study commissioned by the Royal Economic Society in 2004 found that crimes such as graffiti and vandalism had a direct effect on property prices, but areas suffering from a significant number of burglaries were largely unaffected. It seems that visible crimes that blight a neighbourhood have an adverse effect on house prices – an unfortunate conclusion from the study, given that such crimes leave a very obvious sign for potential buyers.
While there is no such law in the UK currently, Megan’s Law in the USA has had an enormous impact on local property prices. The sex offender register was drawn up as part of Megan’s Law names convicted sex criminals and identifies where they live. According to the White Paper ‘There Goes the Neighborhood’ houses next to those of sex offenders achieve sold prices 12 percent lower than comparable homes in their respective towns and cities. It is likely that a similar scheme in the UK will result in the same downward spiral in property prices.
For people unfortunate enough to live in areas with rising crime levels, there is often little that can be done to halt the gradual decline in the value of their home. However, by enlisting the help of a property expert like Flying Homes, a property buyer can be found quickly and with the minimum of fuss.
If you would like more information on the services that Flying Homes can provide then call 0800 68 99 420 or fill in the online instant quote form.