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.