Ex council flat.. Building insurance. Have I been overvalued?

492800

I'm a leaseholder for an ex council flat.
I've just been sent a letter saying that the insurance value has been set at £350,000 for my flat. (it'll cost £320 a year for this insurance). This seems quite a lot.

FYI, I bought 2 years ago for £250,000. I live in Lambeth, south London and the council are the free holders. My block of flats is low-level and small being 2 high, by 6 along.


Am I right in thinking that this value should actually be a rebuild value and not market value?
Or, being a flat is it different?

Lambeth are notorious for ripping people off so just want to check facts before I go on, all guns blazing and then potentially embarrass myself.

Any help appreciated. Thanks.

rs65

492800 wrote: »

Am I right in thinking that this value should actually be a rebuild value and not market value?

Correct .

dacouch

The cost of rebuilding the entire block including all communal areas such as the lobbies, stairs and any lifts etc is divided between all of the flats.

*Scarlett

Are you insuring through the council?

It might be worthwhile getting other quotes.

When insurers quote for cover for a flat they will give the price based on the risk.

Whilst you are only insuring your own flat bear in mind that many insurers will give a blanket buildings cover - £400k to £1m

492800

*Scarlett wrote: »

Are you insuring through the council?

I wish I could choose who to insure with, but Lambeth Living decide who they want to insure us, even if it isn't competitive. we don't have a say in the matter. But if the paperwork/figures are incorrect then at least i could get them to look into it.

But they have confirmed that the amount they have insured my flat for is for the market value of £350,000 (has my property really increased by 40% in 2 years!!!? wow!) ..
But this is odd, as I would have thought they would do it for the rebuild value.

nobbysn*ts

492800 wrote: »

I wish I could choose who to insure with, but Lambeth Living decide who they want to insure us, even if it isn't competitive. we don't have a say in the matter. But if the paperwork/figures are incorrect then at least i could get them to look into it.

But they have confirmed that the amount they have insured my flat for is for the market value of £350,000 (has my property really increased by 40% in 2 years!!!? wow!) ..
But this is odd, as I would have thought they would do it for the rebuild value.

There is nothing to stop you getting an estimate for rebuild cost, and a comparable insurance quote. They are obliged to have a tendering process, and set a fair price to you, they sometimes forget this, and seem to think they can pick a price out of the air, and aren't accountable.

492800

thanks forumers for your replies.

Actually, I was mistaken, it is for rebuild cost..

I always thought the rebuild price usually a lot less than market value? Isn't this usually the case

My top floor flat doesnt have anything too fancy (as you can see from a similar property on streetview here) just some basic communal stairs and bins and that is it. its in a block of 12 duplex flats so not massive either.

When using a rebuild calculator it comes out at £117k, not £350k..

somethingcorporate

492800 wrote: »

thanks forumers for your replies.

Actually, I was mistaken, it is for rebuild cost..

I always thought the rebuild price usually a lot less than market value? Isn't this usually the case

My top floor flat doesnt have anything too fancy (as you can see from a similar property on streetview here) just some basic communal stairs and bins and that is it. its in a block of 12 duplex flats so not massive either.

When using a rebuild calculator it comes out at £117k, not £350k..

The rebuild cost is the rebuild cost, it bears no correlation to the price of the house aside from where prices are high labour and materials costs are also likely to be higher. Some places where house prices are low rebuild costs would be in excess of the value of the house and places where house prices are astronomical then the rebuild would likely come in a lot less than the value.

Our 4 bed semi's rebuild (in the Yorkshire countryside) is quite low compared to the value of our house as it is recently constructed and would be easy to rebuild. Our rental flat in the south is a converted victorian school with a rebuild cost in excess of the market value.

492800

somethingcorporate wrote: »

The rebuild cost is the rebuild cost, it bears no correlation to the price of the house aside from where prices are high labour and materials costs are also likely to be higher.

I guess my main worry is that Lambeth may have made a mistake as they are notorious/horrendous/disgraceful/terrible at making errors and charging incredibly wrong amounts, so I'm just trying to get some knowledge up front before confronting them

(for example, I had a bill for a safety rail in a loft.. worked out at £300 for what in the end was just a piece of scrap wood, 3 foot x 1inch):mad:

dacouch

492800 wrote: »

thanks forumers for your replies.

Actually, I was mistaken, it is for rebuild cost..

I always thought the rebuild price usually a lot less than market value? Isn't this usually the case

My top floor flat doesnt have anything too fancy (as you can see from a similar property on streetview here) just some basic communal stairs and bins and that is it. its in a block of 12 duplex flats so not massive either.

When using a rebuild calculator it comes out at £117k, not £350k..

Your just calculating it for your own flat, you need to take into account the communal areas such as the stairs, the balcony, the bin shed, the concrete shared exterior floor, garden wall and the semi separate staircase building.

The cost of rebuilding the above need to be shared amongst all of the flats.

The flat roof will inflate the cost.

£320 a year for a flat in Lambeth for building insurance is about the going rate

FlameCloud

nobbysn*ts wrote: »

There is nothing to stop you getting an estimate for rebuild cost, and a comparable insurance quote. They are obliged to have a tendering process, and set a fair price to you, they sometimes forget this, and seem to think they can pick a price out of the air, and aren't accountable.

You need to bear in mind that a lot of councils will not insure their flats - they will self insure up to a (very) large amount and then have a policy above this limit. I've seen several councils that we deal with simply base the contributions each flat makes off of the value of the premises rather than rebuild.