Homeowners have been told that the sale cost of their house far exceeds the expense of rebuilding it.
According to a recent study by Direct Line SELECT Premier Insurance, bricks and mortar only account for 59 per cent of the property’s market value, with the average sale price being £114,000 above this, the Money Pages reported.
Therefore, it is important to consider other factors such as local amenities, transport links, schools and demand for houses in the area when getting an insurance quote for the residence or putting it up for sale.
Nick Brabham, head of SELECT Premier Insurance, said: “Although people may be surprised by the amount of value placed on a property’s qualities beyond bricks and mortar, this analysis shows just how much intangible benefits such as; local amenities, location and transport links add to the price of a property.”
The findings showed that people are generally quite unaware about expenses, with Brits typically estimating it costs 38 per cent more to rebuild a three-bedroom house than it would, guessing an average price of £226,750. However, it actually would only be £164,917, despite its market value coming in at 277,608.
Mr Brabham reminded homeowners to have an accurate understanding of the rebuild cost of their house to ensure they are suitably covered in their home insurance policies. If they do have period or bespoke features, for instance, they may find they are under-valuing their homes.
This could be a good time to get essential kitchen repairs done before your insurance company takes a look around, so you can make sure your quote is based on the updated version of your house and not one that still needs work doing to it.