Finding rebuild cost?

mrcol1000

So how do I find the rebuild cost for getting a home insurance quote to keep mortage company happy? I used comparethemarket who automatically put the rebuild value at twice what I am planning on buying the property for based on the number of rooms?? I thought the rebuild value would be less than the market value? So how do I work this out or should I just put what I am buying it for?

House_owner

When I brought my house, the rebuild value was given on the mortgage valuation. It bears little relation to the market value of the property, and is usally alot more. You are probably best sticking with the figure you have got off comparethemarket.

sunshinetours

mrcol1000 wrote: »

So how do I find the rebuild cost for getting a home insurance quote to keep mortage company happy? I used comparethemarket who automatically put the rebuild value at twice what I am planning on buying the property for based on the number of rooms?? I thought the rebuild value would be less than the market value? So how do I work this out or should I just put what I am buying it for?

The ABI have a calculator (you need to register) which should be suitable

http://abi.bcis.co.uk/index.cfm#calculation

Rebuild cost will likely be somewhat less than market value as it doesn't take into account land cost

House_owner

The rebuild costs on both houses I have brought have always been a lot more than the market value of the house

zappahey

sunshinetours wrote: »

The ABI have a calculator (you need to register) which should be suitable

http://abi.bcis.co.uk/index.cfm#calculation

Rebuild cost will likely be somewhat less than market value as it doesn't take into account land cost

The rebuild cost normally allows for the cost of demolition and clearing the site, so can be more than the market value.

sunshinetours

zappahey wrote: »

The rebuild cost normally allows for the cost of demolition and clearing the site, so can be more than the market value.

Mmm interesting. mine have always been consdierably less than market value. may be location specific and type of house/area specific?? Land is obviously more expensive in the SE aswell

sonastin

Also depends on type of property that needs rebuilding. Detached is obviously more straightforward than mid-terrace because you don't have to shore up/connect onto adjacent properties

mrcol1000

sunshinetours wrote: »

The ABI have a calculator (you need to register) which should be suitable

http://abi.bcis.co.uk/index.cfm#calculation

Rebuild cost will likely be somewhat less than market value as it doesn't take into account land cost

This is what the website used. Some say its higher. Some say its lower?! Which is it? Surely it will be lower as the cost to build a house is surely lower than what it will sell for because of value adding items such as the area, off road parking, nearby schools etc...

sunshinetours

mrcol1000 wrote: »

This is what the website used. Some say its higher. Some say its lower?! Which is it? Surely it will be lower as the cost to build a house is surely lower than what it will sell for because of value adding items such as the area, off road parking, nearby schools etc...

I would agree with you - land being the main difference in cost I would have thought. Others however seem to disagree and have had higher rebuild costs on reports than market values?

The ABI site I would have though would give the best guide as its set by insurers

sonastin

Rebuild costs are set by the physical realities of construction, plus the market costs of the materials to re-build and the builders labour costs. Rebuilding a 3000 sq.ft detached bungalow will cost roughly the same, give-or-take, regardless of where the property is located.

Market valuation, on the other hand, is set entirely by the vagaries of the market. No one would suggest that a 3000 sq.ft bungalow set in 1.2 acres in the most desirable town in Surrey is going to be valued the same as an identical bungalow with a teeny-tiny back yard in a really bad area of one of the big cities up north. The market valuation is going to be subject to all sorts of other factors, such as whether there is an easy supply of credit, whether there are lots of people wanting to buy, whether there is a shortage of rental properties, and all the other factors that contribute to our wonderful property boom/bust cycles.

Unless you are talking about a recently completed new build (and even then, the developers overhead, profit and cashflow come into play), market value and rebuild cost are completely unrelated so it isn't really possible to say one will always be higher or lower than the other. There is no rule of thumb.

alan052

I have sent a letter to the FSA & the FOS regarding this disparity regarding re-build costs and sale value of the property. ie re-build calculator £198k to sell at best £210k, the land has no value to the insurer unless the land subsides and that's coverd in reba difrent part of the contract? So we will see
Alan