Rebuild costs vs actual property values

The rebuild cost of a home is the estimated value of rebuilding a house from the ground up, should it become damaged beyond repair. This includes the costs of sourcing and purchasing like-for-like materials, plus any specialist labour needed in the re-construction.

In order to find out how much of a property sale price is made up of the building itself and how much is the surrounding land and the area mark-up, we’ve compared estimated rebuild costs with actual property values across the UK. 

The above graph breaks down estimated rebuild costs vs property sale prices by region. In many regions, the rebuild cost of the building only makes up a fraction of the overall property price, meaning prospective homeowners are paying a large portion purely on location. The worst case of this is London, where you can expect to pay over £331,000 on location alone. 

In these cases where the rebuild cost is more than the property value, it’s likely that the materials used to build the house have increased in cost over time – or the cost of the labour needed to build the property has increased. This means that while the sale value of the house has remained fairly steady, the cost to rebuild it has gone up.

Brought to you by our mortgage experts.

Sources and Methodology

Figures correct as of 12/7/19. Average rebuild prices by region provided by https://www.comparethemarket.com/home-insurance/ from July 2018 to June 2019.

Property prices from July 2018-June 2019:

• https://www.rightmove.co.uk/house-prices.html
• http://landregistry.data.gov.uk/app/ukhpi

Rebuild costs estimates are based on the cost guidance provided by the BCIS. If you would like to check if your current buildings insurance amount still covers the rebuild cost of your home please use the free ABI/BCIS house rebuilding cost calculator or contact a chartered surveyor through the RICS.