Home/Landlord: Rebuild vs Market Value Is an Important Equation

The average market value of properties in the UK is nearly £80,000 more than the estimated cost of rebuilding the property, a new home insurance study by MoneySuperMarket reveals. The survey highlights the importance of automating the rebuild cost, as opposed to the market value of the property, in modern insurtech eco-systems. The issue of cladding is also something that could greatly affect particular rebuild projects, depending on the size and design of an apartment block. In those cases the current market value per unit could be well under the rebuild costs, especially in London.

The research, based on thousands of enquiries on the MoneySuperMarket website, shows that the average estimated rebuild cost is £211,000, £79,000 less than the average market value of a property (£290,000). In effect, this means that homes are valued much higher than the bricks and mortar they are actually built from.

The biggest disparities are in London, where the average market value of a property is £555,000 – £300,000 higher than the estimated rebuild cost (£255,000). In the West End of the capital the average market value rises to £900,000, which is more than three times the estimated cost of rebuilding the property (£290,000).

Wales and the North East are the only regions of the UK where rebuilding a property costs less than the market value, on average. However, on the Isle of Lewis in Scotland, the average cost of a property is £102,000 less than the estimated rebuild cost, the biggest negative difference nationwide.

An important factor in this difference is the price of land, which is likely to be far higher inLondon than in other parts of the country. HM Land Registry data suggests that the average cost of residential land may be more than ten times higher in the capital (£2178 p/m2) than in the North East (£199 p/m2).

About alastair walker 10951 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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