High rebuild cost

mrstick

Hi all,

We've finally had our mortgage offer through for our purchase (yay!).

As part of the info sent across was a sheet entitled 'Automated Desktop Valuation'. This says that the property wasn't inspected, but has been automatically valued at £142500 (our purchase price, obviously).

What it also includes is a rebuild cost, which is shown as £146000.

This doesn't seem normal to me, as our current house was valued at £120000 with a rebuild cost of about £82000.

I know that MSE always talks about making sure that you don't over-insure for building by using your house valuation as the rebuild cost, so this seems a bit strange.

I like to think that it's because we are getting an absolute bargain, but I'm not convinced of that either

Can anybody shed some light on this?

Could it be as simple as a house 2 doors down selling for £190k a month or so back (even though it was massively extended)? I know this sort of thing is why Zoopla's house price estimates are only marginally more useful than the credit score number!

Thanks in advance.

Senior_Paper_Monitor

Rebuild cost can be higher or lower that the overall market value.


Its normally lower - but if there is anything unusual about the property/structure this may not be the case.








In this case it is academic - most policies have a minimum cover standard (rarely less than £500K) so you simply put in the rebuild figure that you have been given by a reliable source and your declaration is valid.


A few thousand on/off the declared rebuild value has little/no impact on cost.

Dird

I have similar
House valuation: £125k
Rebuild cost: £122k for main building + £8k for sheds

I always assumed rebuild would be significantly cheaper e.g. £90k

Let_Us_See

Is it a terrace or semi-detached with the risk that a fire could damage the adjacent properties?

A higher re-build cost is not unusual.

DigForVictory

My beloved money pit is Listed. We bought it for a song & have spent at least two operettas on it since. The rebuild cost is near twice what we paid for it & that was calculated using modern materials & techniques...

Worry not, but enjoy it!

mrstick

Senior_Paper_Monitor wrote: »

Rebuild cost can be higher or lower that the overall market value.


Its normally lower - but if there is anything unusual about the property/structure this may not be the case.








In this case it is academic - most policies have a minimum cover standard (rarely less than £500K) so you simply put in the rebuild figure that you have been given by a reliable source and your declaration is valid.


A few thousand on/off the declared rebuild value has little/no impact on cost.

Thanks, our current policy is a blanket £500k, so I'm not worried, I just thought it was strange.

mrstick

Let_Us_See wrote: »

Is it a terrace or semi-detached with the risk that a fire could damage the adjacent properties?

A higher re-build cost is not unusual.

It's a semi, but it's no different in make-up to our existing house (and only half a mile down the road).

kingstreet

If you live in an area where land costs are high, your value will be higher than your rebuild cost.

If you live in an area where land costs are low, your rebuild cost may be higher than value.

If you wish to do so, measure the square footage and use the ABI BCIS calculator and do your own;-

http://abi.bcis.co.uk/calculator/calculator.aspx