The news that Reggie Kray has left hospital has sparked a gold rush-style frenzy among the growing army of collectors of what has become known as 'murderabilia'. With the last surviving member of the legendary criminal family believed to be nearing the end of his days, collectors are frantically snapping up mementoes at bargain prices, certain that their value will increase dramatically a few years after his death.

Antiques experts say that murderabilia is one of the fastest-growing sectors of the collectibles market. Where once sellers risked abusive phone calls and hate mail for advertising their wares, the spread of internet-based auction services allows sales to be made anonymously. The trade has mushroomed in recent years with bizarre items like bricks from the walkway where O.J. Simpson's wife was murdered, dirt from under the house where John Wayne Gacy buried his 33 victims, and even locks of Charles Manson's hair are selling like hot cakes.

Some of the most sought-after items are the works produced by killers turned artists. Sketches by Charles Manson, both Kray twins and Dennis Nilsen have all sold for thousands of pounds. Although weapons, 'scene of crime' photographs and items of clothing are generally kept as evidence, they find there way onto the market and often sell for far more.

In Britain a copy of the Kray autobiography, Me and My Brothers, signed by both twins, is on sale for £450 at the London branch of Frasers Autographs. Signed pictures of the pair as young boxers sell for around £400 but are expected to top £1,000 within a year of Reggie's death.

Paul Mulvey runs a market stall at Alfie's Antiques Market and has a huge collection of murder memorabilia. 'Letters and signatures are among the most common items, but the value depends on the content. A letter from Charles Darwin where he's writing about his theories on evolution is worth an awful lot more than one where he writes that he can't make it to a dinner party. I know someone who has a letter from Dennis Nilsen - the civil servant who murdered 15 men at his home in Muswell Hill - where he explains why he decided to let one of his victims go. That's got to be worth at least £1,000, but he'd never sell it.

'I've got Kray signatures here that go for £50 a time, but I've seen one where someone caught Ron in a bad mood. They asked him to sign a picture and he wrote on it "Don't ask again, Ron". That's almost priceless.'

Interest in some cases is so strong that special precautions often have to be introduced. When 25 Cromwell Street, the house where Fred and Rose West murdered nine young women, was demolished, police guards were brought in and contractors ordered to destroy all fittings and reduce all brickwork to dust.

But although collectors are keen to acquire more modern items, the trade is kept hidden from prying eyes. One dealer, who asked not to be identified, believes owners of the most valuable items are too terrified to publicise their existence. 'I once stupidly advertised a signature belonging to Fred West and ended up with hate mail for months. The good thing about the internet is that it has really opened up the market. There are people out there who have things belonging to the likes of Ian Brady, pictures by Peter Sutcliffe, death certificates signed by Harold Shipman and the like. They're all good collectibles, but it will still be a few years before anyone will accept them on the market, even on the internet.'

The mainstream trade is restricted to more historical items. Major auctions houses such as Christies have sold items belonging to the last woman to be hanged, Ruth Ellis, Rillington Place killer John Christie and Chicago gangster Al Capone. A pocket watch belonging to Dr Crippen fetched more than £10,000. The problems begin with items belonging to more recent killers.

In recent weeks the largest online auction company, eBay, chief source of many of the most distasteful items, has come under increasing pressure to withdraw them from sale. The move is being strongly resisted. 'Some of the merchandise may be questionable or distasteful but we don't want to play the role of censor,' said an eBay spokesman. 'As long as sellers are following the laws within the country where they reside, they may sell whatever they choose.' The spokesman admitted that the company takes commission on each sale and receives regular complaints about murderabilia sold on the site.

tony.thompson@observer.co.uk