When it comes to the housing market, it goes without saying that buyers make decisions not only based on their basic housing needs but on security concerns and perceptions that arise from the surroundings. Therefore, it is useful for buyers and sellers alike to consider the correlation between house prices and local crime rates. This article explores the evidence that exists to show crime rates and house prices are linked, what the experts have to say on the matter, and how buyers and sellers should go about using this information.
1. Evidence of a Correlation Between Crime Rates and Property Sales
Sourcing concrete proof that there is a link between local crime rates and the value of properties is not as simple as it sounds. This is due to the fact that crime rates are often naturally higher in areas with property prices that are lower than average.
A 2004 report from the Royal Economic Society demonstrated that the rates of burglaries in an area did not necessarily have a direct impact on the area’s house prices, while areas suffering from visible crimes such as anti-social behavior, graffiti, and vandalism were more vulnerable to reduced property values. However, surveys sourced by Churchill have found that when it comes to home buyers, local burglaries and drug-related crimes are the biggest concerns.
In the US housing market, Megan’s Law has had a significant impact on house prices. The law makes registered sex offender’s identities and addresses public, meaning that real estate properties in a neighborhood shared with a registered sex offender sold for lower prices. This law, however, has made it possible for buyers to make a more informed decision.
2. The Expert Opinion
In the US real estate market, it is a widely accepted fact that crime rates have a direct impact on property values. In many areas of the world, statistics for burglaries, robberies, vehicle crime, and anti-social behavior are made public for many neighborhoods, making it easier for individuals to make their own informed decisions.
Surveyors have been very vocal with their concerns that publishing crime statistics could have a direct effect on house prices in a way that is unnecessary. A similar effect was witnessed in the way the publishing of hospital and school league tables had a direct impact on property sales. Conclusively, higher levels of crime concentrated in specific areas will inevitably lower the demand for private housing, eventually leading to a decrease in house prices.
3. How You Can Counteract the Effect of Crime Rates on House Prices
Regrettably, there are very few actions property owners can take to counteract the effect that local crime rates have on their house prices. Experts, councils, and governments have recommended that neighborhoods work together to create a more vigilant environment, establishing neighborhood watch schemes to create a safer and more appealing area.
For those looking to buy a property, it is now easier than ever to research local areas. Real estate websites designed to help you find a property now have in-built tools to check for local schools, transport links, the nearest facilities, and local crime rates. This means that potential buyers can easily research areas at length and eventually make a more informed and empowered decision. However, the result so far has been that areas with more reduced-price properties, higher crime rates, and lower-rated facilities have seen a significant decrease in demand for properties.
For those with properties in areas associated with higher crime rates who are looking to make a quick sale, there are a few fixes you can make to your property that may help you. Consider installing some effective and highly-regarded security features to your home. These features will not only make it more difficult for criminals but also help your home appear safer for prospective buyers. This can have a positive impact on making a sale – but it is unlikely to have a significant impact on the sale price, however.
This article has been contributed by Ross Hansen.