Estimated reinstatement cost for insurance proposes

Steve2018 · 16 April 2017 at 9:06AM

I'm looking at a house to buy in Scotland and the home report says the current value is £85,000 but the Estimated reinstatement cost for insurance purposes should be above £300,000.... This seems a big difference, is it something to worry about?

haf1 · 16 April 2017 at 9:18AM

I don't think there is any need to worry.

The reinstatement value is an estimate of the cost of "worst case scenario" rebuilding the house as it stands - i.e., from scratch, using the same materials, and if it is a terraced house, making sure neighbouring properties don't fall down in the process.

Our house's reinstatement value (100yo terrace in England) is well over twice the market price. Just read up on "reinstatement value" on Google, this doesn't mean there is anything wrong with the house

phill99 · 16 April 2017 at 9:24AM

As above. Very common to have a reinstatement value much higher then the open market value. Remember if the house explodes, there will be shoring up works, site clearance works, emergency surveyors and builders works etc which you don't get with a new build.