How to calculate your house rebuild cost

What is the rebuild cost of a house?

It’s how much you’d need to pay to completely rebuild your home to its existing design and specification if it was destroyed by an event like a fire or flood.

According to Defaqto, 97% of 303 buildings-only policies had a maximum building value of £300,000 or more.^[2] House prices are usually more than the rebuild value, so most policies seem to offer more than enough to cover your rebuild costs.

The figure will include the cost of materials and labour. It should also factor in other associated expenses including:

• Demolishing and clearing away the property
• Installing plumbing, gas, electricity and lighting
• Permanent fixtures and fittings (kitchen cabinets and bathroom suites)
• Professional costs (architects, surveyors, consultant engineers and legal)

Why do I need to know the rebuild cost of my home?

Buildings insurance covers damage to the fabric of your home. This includes the:

• Walls
• Ceilings
• Floors
• Windows
• Permanent fixtures and fittings (fitted kitchen and bathroom suites)

If your home was destroyed by a catastrophic event like a fire or flood, your buildings insurance would cover the cost of rebuilding your property from the ground up.

So, when you get quotes for insurance, providers want to know the rebuild cost so they can calculate your premiums based on that sum.

The rebuild cost is called the ‘buildings sum insured’ in the policy booklet. It’s the maximum amount your insurer would pay out for a claim and should be enough to cover the full rebuilding cost of your property.

It’s important to calculate your rebuild costs as accurately as possible and check you’re insured for the right amount. That way, you won’t have to fork out for any shortfall because you’re underinsured. It works the other way too, of course. If you overestimate the rebuild cost of your home, you could be paying a higher premium unnecessarily.

Remember that you may need to adjust the buildings sum insured on your property over time. Renovation work and extensions can increase the rebuild cost, as can changes in the building materials used. So you need to let your insurer know about any building work. Your premiums may need to be recalculated as a result.

Is the rebuild value of my home the same as the house value?

No, these are different things.

The rebuild value is what it’d cost to rebuild your home from scratch, from the ground up. The house value, or market value, is the price your home would sell for on the current property market.

Your property’s market value is likely to be higher than the rebuild cost because it includes the cost of the building, as well as the land it stands on. It also factors in the location and local amenities.

So make sure you base your buildings sum insured on its rebuild costs, not the current market value, or you could end up overinsured and paying more than you need to.

How to calculate the rebuild costs of your house

The rebuild cost can be broken down into two main factors:

• The cost of materials
• The associated cost of labour

You can usually find the rebuild value in:

• Your mortgage valuation report
• The deeds to your home
• A surveyor’s report
• Your buildings insurance renewal documents

We can help you calculate your house rebuild cost using the Building Cost Information Service (BCIS) when you compare buildings insurance.

According to Defaqto, 97% of 303 buildings-only policies had a maximum building value of £300,000 or more.^[2] House prices are usually more than the rebuild value, so most policies seem to offer more than enough to cover your rebuild costs.

Rebuild costs can change over time, so if you’re not sure whether you still have an accurate valuation you can use the BCIS's rebuild cost calculator.

Alternatively, you can hire a chartered surveyor to evaluate your home and prepare a reinstatement cost assessment. It’s not cheap, but it could be worthwhile if you want accuracy.

What factors affect the rebuild cost?

All sorts of factors affect a property’s rebuild costs including:

• Type of house - Whether it’s terraced, detached or semi-detached
• Number of storeys - The total floor area of your property across all floors
• Number of bedrooms - How many rooms are used primarily as a bedroom
• Number of reception rooms
• Number of bathrooms
• Wall material - If the walls of your property are built from materials that are hard to find or cost a lot to replace (timber, structural glass, cob, wattle and daub, straw bale or flint), it can push up the rebuild cost
• Roof material - A roof made from anything other than the usual tile or slate will be more expensive (thatched roofs, for example)
• Whether your home has a basement/cellar
• Garage - How many car spaces it has
• Conservatory - Extensions and conservatories add to rebuild costs
• Swimming pool - Pools may be covered by buildings insurance
• Solar panels - These are likely to increase your home’s rebuild value
• Is it listed? - Listed buildings usually cost substantially more to rebuild than homes of standard construction. They require specialist materials and labour. Building work will need approval by planners and heritage officers, too

What does buildings sum insured mean?

This is the maximum amount that your insurer will pay out to rebuild your home from scratch.

It’s not the current value of your home or the price you paid for it.

The sum insured will be stated on your home insurance policy - check that it’s enough to cover a rebuild of your property or you’ll have to pay the shortfall yourself.

Some policies provide an unlimited buildings sum insured, so you don’t need to specify the rebuild costs.

Will my rebuild cost change if I renovate my home?

Yes. If you add an extension, loft conversion or make structural changes to your property it could increase the rebuild cost.

You must let your insurer know about these changes so that your premium can be adjusted.

Find out more about home renovations and home insurance.

What happens if I don't get the value right?

Underestimate

If you underestimate the rebuild value of your home, your insurer may not pay the full cost of repairs if you need to make a claim.

For example, say you’ve told your insurer the rebuild value of your home is £100,000, but when it comes to claiming you discover the rebuild will actually cost £150,000.

Unfortunately, your insurer will only pay out the £100,000 figure you told them - so you’ll end up losing out.

Overestimate

“Overvaluing the rebuild cost of your property could mean that you’re paying more money than you should be for your home insurance, as your insurer will only ever pay out for the cost of the rebuild regardless,” says Go.Compare’s home insurance expert, Ceri McMillan.

The market value of your home is usually more than the rebuild cost, so don’t rely on that figure.

Rebuild costs for listed and non-standard construction buildings

The rebuild cost of listed properties and those constructed from non-standard materials may be more expensive than for a regular home.

This is because of the costs associated with replacing materials such as thatched roofs, as well as having to hire specialist professionals.

What if I live in a flat or maisonette?

If you own a flat as a leaseholder, it’s unlikely you’ll be responsible for arranging buildings insurance. It’s usually up to the freeholder. You and the fellow leaseholders usually pay towards it in the form of a service charge.

But if you own the freehold for your flat, or a share of the freehold, then it’s your responsibility to buy buildings insurance. It could be a good idea to get a professional rebuild valuation from a chartered surveyor for a block of flats.