House value v rebuilding cost

kuepper

Getting quotes for renewal and according to bcis calculator my rebuilding cost is £225k but my little bog standard mid terrace only has a value of £102k. I don't want to under insure but isn't this difference odd?

Owain_Moneysaver

Not really; the rebuilding cost would be similar if your terrace was in an area where a little bog standard mid terrace had a value of £500k.

Also for rebuilding as a terrace you'd have to maintain support for the neighbours' houses and their foundations while the work was in progress, and rebuild in a similar style and finish to the rest of the terrace. If this means matching bricks etc then that puts the price up compared to a standard new build.

My flat is insured for rebuilding cost about 10 times the market value. I suspect insurer's minimum values come into play.

InsideInsurance

kuepper wrote: »

Getting quotes for renewal and according to bcis calculator my rebuilding cost is £225k but my little bog standard mid terrace only has a value of £102k. I don't want to under insure but isn't this difference odd?

The two are almost totally unrelated, put the same property in different places and it will cost anything from £75k to over £1m and yet the rebuild cost will be almost identical

magpiecottage

This is quite normal. It means that in the South East properties are generally insured for less than their market value but in the North they are insured for considerably more.

Aretnap

My 3 bedroom end terrace house in Cambridge would probably sell for about £250K. If it were magically transported to one of the more fashionable parts of London I imagine it would be worth at least half a million, maybe more. OTOH there are empty run down streets in the grottiest parts of some northern cities where I'd struggle to sell it at any price at all. But if it burned to the ground the cost of rebuilding it would be the same regardless of its location - somewhere in the region of £150K.

smifffy1989

You will find that many insurers will offer buildings cover for a much higher value anyway. This makes sure that your building is not underinsured.

My property is insured for £600k as standard, there was no option for anything less. My house is not worth half that!

System

If you own the ground floor flat of a 30 storey tower block, you'd have to insure for the cost of holding up the rest of the tower while yours was rebuilt

kuepper

thanks for replies, feel stupid it never occurred to me before. Anyway Saga has provided me with best quote by £75 even though it covers roughly twice as much as I need ( 500k building and 50k contents) as standard though I've heard they give good 1st year deals but then hike it up thereafter