Do Local Crime Rates Affect 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 ultimately 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 merely a matter of logging on to the local police force’s crime map. As a result, homebuyers now have access to detailed crime statistics at their fingertips, and they are using them to make purchasing judgements on specific neighbourhoods. The unfortunate consequence is falling average property prices in severely affected areas.

What the experts say about local crime rates and average home prices

While there is a lot of anecdotal evidence that local crime rates in the UK intrinsically link to average house prices, RICS is concerned that publishing figures could affect property prices in the same way as hospital and school league tables. The Home Office has committed to making public statistics relating to burglary, street robbery, vehicle crime and anti-social behaviour – in particular neighbourhoods. Contrary to RICS, the Home Office claims 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, which will inevitably lead to lower property prices.

What can be done to counteract the effect crime has on house prices?

Unfortunately, there are tiny existing homeowners can do to negate the effect that local crime rates have on the value of a 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 a crime can remain tarnished long after being made safer.

Buying a home is a considerable 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.

Homeowners 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 find buyers, but such improvements are unlikely to affect sold prices significantly.

Is there evidence to prove a link between crime and average property values?

Local crime rates

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 directly affected property prices. Still, areas suffering from a significant number of burglaries were primarily unaffected. Thus, it seems that visible crimes that blight a neighbourhood harm house prices – an unfortunate conclusion from the study, given that such crimes leave an undeniable 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 sex-offenders achieve sold prices 12 per cent lower than comparable homes in their respective towns and cities. A similar scheme in the UK will likely result in the same downward spiral in property prices. There are UK websites that show crime rates by postcode, so if looking to buy a house, at least you have the opportunity to make an informed decision in believing in an area with high levels of crime. Protection Status