Should rebuild cost be a lot less than house price?

(7 Posts)
MissMysticFalls Thu 05-Jun-14 16:49:51

We've just had our survey back on the property we want to buy. The surveyor says we should get building insurance based on it costing about 150k to rebuild. This is a lot less than the fixed asking price that it was on the market for and which we offered to buy it for. Should we be worried? It is a detached property in a naice South East village - would that explain the difference?

Thanks!

minipie Thu 05-Jun-14 16:51:55

Yes, totally normal for insurance rebuild cost to be less than price.

Remember a lot of what you are paying for in the sale price is the land - not just the bricks and mortar etc which is what rebuild covers.

mousmous Thu 05-Jun-14 16:52:02

seems normal
in our case it's about half the purchase price.
you have to remember that you are paying for the land and location as well as the shell of the house.

Hobbes8 Thu 05-Jun-14 16:52:38

The rebuild cost doesn't include the cost of the land, so yes it should be cheaper. Eg if the house is £300k and the rebuild cost is £150k, then the cost of the land is £150k.

FriedaMensch Thu 05-Jun-14 16:55:59

Yes - that's why a similar house in, say, London and the North East cost such different amounts - the different value is due to land price.

MissMysticFalls Thu 05-Jun-14 17:01:19

Thank you all for replying so quickly! That's a relief. I know people say that surveys are a bit scary - this is my first one - so it's great to have your replies to stop the panic setting in. thanks

Spindelina Thu 05-Jun-14 17:21:20

Unless you live in a 200 year old listed property on a steeply sloping site. Our rebuild cost is substantially more than the purchase price!

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