Rubbish could reduce the cost of a home by up to 12 per cent and estate agents are adjusting their valuations because of the blight.

Cigarette butts and food wrappers on pavements or wheelie bins overflowing with rubbish will put off house buyers before they see the property, according to a report commissioned by environmental campaigners Keep Britain Tidy. Estate agents have backed the research, saying first impressions count when hunting for a home and that the negative impact of litter on surroundings should not be underestimated.

Communities and Local Government Minister Eric Pickles said that fewer bin collections were in part to blame for the situation.

He said: "The Labour government's policies of imposing fortnightly bin collections and encouraging a proliferation of confusing bins resulted in more flytipping, litter and bin blight.

"This government has actively supported weekly bin collections and has changed building rules to ensure new homes are built with space for bins to be discretely and safely stored rather than disfiguring every street."

While most owners make the interiors and gardens of properties look as good as possible before putting them on the market, few will think about removing litter in surrounding roads in advance of viewings.

The study, Exploring The Wider Costs Of Litter, revealed rubbish strewn around streets in towns and cities, or flytipping in country lanes, can take between 2.7 per cent and 11.8 per cent off the value of properties. The average house price in England and Wales at the end of last year was £176,581, so using these percentages, the presence of litter would take £4,768 to £20,837 off its value.

In London, the average house price was £461,453 last month, so £12,459 to £54,451 could be knocked off the value, while in the South-west between £4,996 and £21,836 would be lost from the average £185,051 value of a home.

Homeowners in the North-west, average price £112,566, would lose £3,039 to £13,283, while in the Northeast, average value £97,783, the price could be reduced by £2,640 to £11,538.

Mark Hayward, president of the National Association of Estate Agents, said: "When you are buying a property, you buy with your heart, not your head, so first impressions are important. Impressions of a property are made within the first two minutes, so the street leading up to it can make the buyer say 'No thank you'."

Researchers from Keep Britain Tidy used evidence from global studies of the effect of litter on house prices, particularly in the US.

A National Litter Survey carried out in America found 93 per cent of those polled would be influenced by litter while 55 per cent of estate agents said litter in streets would prompt lower valuations. The results of this survey were used to create a pricing model, which Keep Britain Tidy says applies accurately to the UK market.

Its report states: "To give an idea of scale, however, if just one per cent of the 22 million households in England were devalued by £4,180 because of the presence of litter, the potential devaluation of the housing stock would be just under £1billion."

Mr Hayward, an experienced property consultant, said: "If a street is strewn with litter, people will see what could come with this, such as crime and anti-social behaviour. This will make people think, 'Do I want to bring up my family in an area like this?' It may be there is a takeaway nearby and people are discarding wrappers. It may be trolleys from a nearby supermarket left at the top of a road.

"Rubbish becomes an immediate issue if you drive down a street. It makes a huge difference to an area if at the top of a lane someone has dumped a mattress, or you have travellers nearby that will blight an area." He advised homeowners to set up community schemes with neighbours to get rid of litter well before putting their property on the market.

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