Would you live in a house where a terrible crime had taken place? Or in a street that is known to be dodgy?

Intuitively, there should be a pretty substantial link between crime rates and property price, because who would want to pay big bucks to live in a suburb where you need eyes in the back of your head to make sure your car doesn’t get stolen or your house broken into?

But just how big a factor does an area’s crime rate – or a house’s – really play? In the UK, police have launched a new website, Police.uk, which allows you to find out what crimes have taken place in your area, down to the street level. There’s even crime hotspot maps, as well as apps for iPhones and Google Android phones.

As reported by The Guardian, the move has some property experts worried that it will impact on prices in areas where crime levels are higher because house hunters will now be armed with knowledge and dangerous to estate agents and vendors trying to pull the wool over their eyes.

In Australia, we’ve already seen buyers being swayed by online information on the MySchools website, with agents reporting that families are seeking streets that fall within certain high-performing school zones. If house hunters also had crime stats at such a localised level at their fingertips, would it have a similar effect?

There’s been some interesting research done overseas on crime rates and property prices. A 2004 London paper by the Royal Economic Society – The Costs of Urban Property Crime – investigated the impact of recorded domestic property crime on home prices in the UK capital.

It found crimes that involved criminal damage such as vandalism and graffiti had a significant negative impact on prices. But burglaries had no measurable effect.

The authors surmised that because they are on public view, forms of criminal damage motivate a fear of crime in the community and can also be taken as signals or symptoms of community instability and neighbourhood deterioration in general.

In the US there are registers of known sex offenders, brought about by what is known as Megan’s Law. In California, for example, a website allows you to search a map and find out the addresses, photos, dates of birth and types of crime committed by 33,500 offenders in Californian communities.

It makes for very disturbing reading, and as a mother of two small children I really wish I hadn’t looked. Not that I live in California, of course, but search on any city on the site’s map and there is disturbing number of little blue squares that pop up, which indicate the residence of a sex offender. You have to wonder if it’s much different in any other place around the world.

A 2006 paper – There Goes the Neighborhood? Estimates of the Impact of Crime Risk on Property Values From Megan’s Laws – found that houses next to a registered sex offender sell for about 12 per cent less, while those about 160 metres away trade at a 4 per cent discount, and at more than 160 metres there is no price decline. Just 160 metres? It’s not that actually very far, is it?

I wondered what the situation was like locally and asked Australian Property Monitors to run an analysis of reported crime by local government areas in NSW overlaid with property prices to see if actual crime rates affected house values in Australia. But no strong relationship showed up.

“There’s not a lot of correlation in figures,” noted Andrew Wilson, APM’s senior economist.

Kim Quick, a senior property valuer with Herron Todd White, says one-off, high-profile crimes in an area can affect property prices but any negative affects would generally wear off once publicity surrounding the event stops.

But it’s a different story in the case of a crime, such as a murder, being committed in an actual home that is later put up for sale. For pretty obvious reasons many buyers wouldn’t even look twice at a property where they knew something like that had occurred. It’s an issue that hit the headlines back in 2005 when the house where NSW student Sef Gonzales murdered his family was being sold.

Two agents marketed it without telling the buyers (who came from overseas) of its history, and were fined $20,000 for doing so. When the agents were forced to hand the buyers’ deposit back and relisted the property, they had to advertise the home’s tragic history.

The Gonzales’ home eventually sold for $720,000, $130,000 less than the original asking price of $850,000, and $80,000 less than the figure the first buyers had paid before their drawn-out battle to back out from the sale once they found out what had happened in the home.

In that case, the final price was surprisingly high, given what had happened in the house. And many people thought: “How could you live there”?

You might have expected the discount to be more like 50 per cent before anyone would consider living in a home where three lives have been lost in such circumstances. Or even for it to be sold at land value, because surely a lot of people would just want to remove the existing house and start over again.

For crimes such as robberies and theft, Quick says it doesn’t matter so much about the actual crime rate in an area, it has more to do with the perception of whether an area is safe.

Either way, she says, if you are buying in an area you don’t know too much about, you need to do your research.

“Most potential purchasers would act with confidence when purchasing in their home city, and have a fair idea or where they can get most value for their dollar – they can research real estate sites or act on the recommendations of friends or family.

“However, if you are purchasing interstate and the property appears a bargain then it could be for a sinister reason and extending your research by asking the neighbours or local shopkeeper might be beneficial.”

Would you buy a house in which a pretty bad crime had been committed? And how much importance do you give to an area’s crime levels when buying or choosing where to rent? If Australian police went down the path of the UK in putting a crime map online, would you check it before you bought?