How to calculate house rebuilding costs

Calculating the rebuilding costs of your house for insurance

Calculating the rebuild cost of your home is a necessary part of getting a home insurance quote.

The rebuild cost is the amount of money required to reconstruct your home from the foundations up, if your property was damaged or destroyed, in a fire or flood for example.

It can be broken down into two main factors:

• The cost of materials
• The associated cost of labour

The rebuild cost is usually lower than the market value because it doesn’t include the cost of the land your home is built on.

What is the rebuild cost of my house?

It’s how much you’d pay to completely rebuild your home, including the cost of materials and 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, 94% of 311 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 cost calculator

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

Alternatively, you can hire a chartered surveyor to evaluate your home and prepare a reinstatement cost assessment. That could cost a few hundred pounds, but it could be worthwhile for the accuracy of the information it contains.

If you’ve made major changes to your home, like adding an extension, then you’re likely to need a new rebuild value and should also let your insurer know.

What factors affect the rebuild cost?

• The price of labour
• The cost of materials used and whether they're standard or non-standard
• Type of property - whether you live in a house, bungalow, purpose built flat or conversion flat
• Style of property - semi-detached, terraced, detached and so on
• Size of property - external floor area, the number of floors, bedrooms and bathrooms, and if there’s a garage and cellar
• Age of your property - older properties and listed buildings can be more expensive to rebuild

Will my rebuild cost change if I renovate my home?

Yes – if you add an extension, loft 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 to accurately reflect the full amount of cover you need.

Find out more about home renovations and home insurance.

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

Underestimate

If you underestimate the value of your home, your insurer might 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

Don’t over-estimate the rebuild value of your home - you’ll end up paying too much for cover you don’t need.

“Overvaluing the rebuild cost of your property could mean that you’re paying more money than you should be for you home insurance, as your insurer will only ever pay the cost of the rebuild regardless,” says GoCompare’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 properties made from non-standard materials, such as brick or tile, might be more expensive to rebuild than a regular property.

This is due to the costs associated with replacing materials such as thatched roofs and the costs of hiring a specialist professional to construct them.