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pyracantha

Home Report Insurance Vs Market Value

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The house next door to where we are renting has gone on the market today. The Home Report reinstatement cost for insurance purposes is stated as £136,000. The Market Value is stated as £225,000. This seems a huge difference to me.

Can the difference be ascribed to the poor condition of the property or is it just because of the huge disconnect between the true value of property and what it sells for? Any other reasons?

Is anyone else seeing this sort of difference between the two values?

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The house next door to where we are renting has gone on the market today. The Home Report reinstatement cost for insurance purposes is stated as £136,000. The Market Value is stated as £225,000. This seems a huge difference to me.

Can the difference be ascribed to the poor condition of the property or is it just because of the huge disconnect between the true value of property and what it sells for? Any other reasons?

Is anyone else seeing this sort of difference between the two values?

The insurance cost is the cost of rebuilding the property and has very little do do with the market value of the property. Consider that an identical house built in Parkhead vs. The West End would have identical rebuild costs but very different market values.

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The insurance cost is the cost of rebuilding the property and has very little do do with the market value of the property. Consider that an identical house built in Parkhead vs. The West End would have identical rebuild costs but very different market values.

OK but another bungalow in Clarkston (better nick) has an Insurance Cost of £325k vs a Market Value of £315k. So in this case the insurance cost is greater than the market value unlike the 1st example. :huh:

Incidentally, the £315k house went on at o/o £310k a couple of months ago and is now o/o £289k.

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OK but another bungalow in Clarkston (better nick) has an Insurance Cost of £325k vs a Market Value of £315k. So in this case the insurance cost is greater than the market value unlike the 1st example. :huh:

Incidentally, the £315k house went on at o/o £310k a couple of months ago and is now o/o £289k.

It is unlikely that big differences in insurance resinstatement values are due to one house being in better nick than the other. the costs is (for example) to cover the rebuild of the entire property should it be burnt to the ground. Under these circumstances the condition of the insured property is not terribly relevant!

The insurance reinstatement cost of a property WILL be highly dependent on the materials used the contruct the property. A modern house made of blockwork and timber will have a far lower reinstatement value than a period property made of sandstone or granite, becuase the materials and labour involved in rebuilding it would be that much higher.

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It is unlikely that big differences in insurance resinstatement values are due to one house being in better nick than the other. the costs is (for example) to cover the rebuild of the entire property should it be burnt to the ground. Under these circumstances the condition of the insured property is not terribly relevant!

The insurance reinstatement cost of a property WILL be highly dependent on the materials used the contruct the property. A modern house made of blockwork and timber will have a far lower reinstatement value than a period property made of sandstone or granite, becuase the materials and labour involved in rebuilding it would be that much higher.

Many thanks for the clarity fflump. Much appreciated.

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The house next door to where we are renting has gone on the market today. The Home Report reinstatement cost for insurance purposes is stated as £136,000. The Market Value is stated as £225,000. This seems a huge difference to me.

Can the difference be ascribed to the poor condition of the property or is it just because of the huge disconnect between the true value of property and what it sells for? Any other reasons?

Is anyone else seeing this sort of difference between the two values?

You need to factor in the cost of the land and provision of basic services to the property

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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