The process of buying a house can often present a number of questions, especially for first-time buyers. However, if one thing is certain, it’s the need to have your new home fully insured to cover all buildings and contents.
What’s more, to obtain a mortgage on a property in the first instance, a lender will need to see that the property is correctly insured. When purchasing insurance cover, it’s important to have the results from a Reinstatement Cost Assessment (RCA) to hand.
The reinstatement cost of your home is the estimated price to rebuild the property in the event of destruction. A qualified building surveyor will need to perform an official assessment to provide an exact breakdown.
Reinstatement cost of the property
|Property type||Unit||Cost - Range Low||Cost - Range High||Average Reinstatement Cost|
|Standard semi-detatched house||Per m2||£1,500||£2,000||£1,750|
|Two storey bungalow||Per m2||£1,250||£1,750||£1,500|
Ultimately, the cost of reinstatement will depend entirely on your property. As an example, the cost for a standard semi-detached house will likely fall between £1,500 – £2,000 per m2.
In London, the cost will naturally be higher to reflect property prices in the capital, with the average reinstatement cost sitting between £1750 to £2500 per m2. This would be based on an average specification and a standard build method.
For a two-storey bungalow, you might expect to see a rebuild cost of £1,500 per m2 or £1,875 in London.
Current reinstatement cost
To find out how much your property’s Reinstatement Costs will be, you should use a qualified surveyor. You will get an accurate valuation that your insurance company can use to calculate the amount of cover you receive. This will keep you protected from financial loss should an accident destroy or dilapidate your home.
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What is a Building Reinstatement Cost Assessment?
According to the official RICS guidelines, a Reinstatement Cost Assessment is an assessment of building reinstatement cost for insurance purposes. An RCA will also provide an estimate of the total cost of demolition, along with professional fees and any statutory authority fees.
What factors are taken into consideration when calculating the rebuild value?
When performing an RCA, a qualified surveyor may run into certain issues that influence the reinstatement cost. These include:
If your property was built before 1999 and contains asbestos, removing this will come with an additional cost.
If the property is a listed building, specialist restoration techniques will likely increase the cost to rebuild.
For example, if the surrounding area of your home is a conservation area, demolition may be more complex and therefore increase the price to rebuild. The cost to rebuild will always skew higher in cities and London in particular.
Depending on where your property is situated, you may need to cordon off the area to facilitate the rebuild of your home. If this is the case, the costs will be chargeable to the local council.
Should the reinstatement cost be higher than the market value?
The cost to rebuild your home should be lower than the market value. An RCA only takes into account the cost of labour and materials to complete the rebuild rather than the cost of the land itself.
While online calculators may be able to provide an estimation, we recommend hiring a qualified surveyor to avoid over-paying on insurance or risk being under-insured should the worst happen.
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