A friend who is in the business of remortgaging his house has fallen between two bureaucratic stools. The house is insured for £300k but the while property is alledgedly only 'worth' £285k and he needs an accurate BCIS valuation carried out.
Who can do this? - its a timber farmed thatched affair mostly, with a slightly more modern extension, West Suffolk area...
Get the mortgage company to recommend someone. They will want a valuation they are happy with anyway.
What's the problem? There are still parts of the country where you can buy property for less than the cost of building it.
A surveyor will be happy to do this for a fee, and the lenders will happily accept his report. It may not be accurate, as it's a one-off property, but what else can be done.
The problem is that the mortgage company wont release funds on the new mortgage without one.
Its idiotic, The house is insured for more than its worth including the land, but that is apparently not good enough.
So a chartered surveyor, who will basically whta he is paid to say, within reason?
Don't know anyone specific to W. Suffolk.
Any RICS registered surveyor should be able to do it, though one who specialised in such building might be better. The value for insurance purposes is the rebuild cost not the market value. For the typical barratt hutch that would likely be less than market value but any sort of unusual property the cost of site clearance, reinstatement of listed buildinf, to original specification etc could mean a greater than market value.
Why not move insurance to one who will cover up to say £500K without proof of rebuild costs? I can't see why the mortgage company would need a rebuild cost.
Again I can't see why the mortgage company would need a rebuild cost - they are securitised on the property value.
A reputable Chartered Surveyor will *not* say what s/he is paid to say, not if they wish to remain members of the RICS.
For such a property you will need to get a Chartered Building Surveyor.
In message , "Dave Plowman (News)" writes
Insurance value for buildings normally includes the cost of clearing the site ready for the re-build.
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My house is insured for 1 million but I'd be lucky to get less than a quarter of that if I sell it.
The mortgage company is not interested in the insurance value. They are only interested in recovering their money (plus expenses) if they have to sell the house.
It's perfectly reasonable for the mortgage company not being prepared to take any account of the insured value - which will (hopefully) be based on the re-build cost rather than the market value - and the two can be quite different in either direction.
If your friend defaults on the mortgage and the house has to be re-possessed, the mortgage company will only be able to sell it for its market value - even if it's insured for a million quid!
Mine is covered for half a million as that's the minimum the insurers do. It doesn't mean I will get half a million if anything happens, they will just put it right. Insurance valuations are about as good as an estate agents valuation.
They want to know they will get their money back if anything happens. that includes market crashes making the house worthless. they want to know how much they can sell it for when the ownership passes to them.
Do remember that the cost of a house includes the cost of the site. In some areas that is remarkably high. The rebuilding cost would be much less.
It's not, old character properties often cost a good deal more to rebuild t han their sale value. He should have more insurance.
NT
On Wednesday, 17 February 2016 17:51:03 UTC, The Natural Philosopher wrote :
It need only be insured for the rebuild cost anyway. Mush less than the property valuation.
In message , harry writes
Slightly more complicated than that. One can discount the value of the land which does not need to be replaced, and add the cost of rebuilding plus the cost of site clearance plus the cost of repair or replacement of services - underground and overground cables, pipes etc.
Beyond that, the variables can be enormous depending on type of structure and any historical interest, grading etc. A modern box is going to be a cheaper rebuild that an interesting but much older building where modern standard construction would not be suitable.
Historic buildings can be much more costly to rebuild, involving specialist s, now pricey materials and high skilled labour content. Insurance also nee ds to cover loss of other goods, temporary accommodation, and the added cos ts of obtaining consents for or working around obsolete building methods & standards. 300k cover for a 285k historic building is simply inadequate.
NT
Well yes if you have 10 acres of prime land and only a wooden framed brick lined bunker to rebuild. If you have the average 0.05 acres somewhere people want/have to live and a decent house it will cost more to rebuild than the land + building is worth.
I used to do insurance valuations for RICS surveys. I'm afraid it wasn't very much more complicated than consulting a fairly comprehensive table of costs, floor areas, property and construction types and regions. This was 30 years back though . . .
For more esoteric buildings not covered by the tables or caveats we'd refer to a specialist surveyor.
and again... what has a rebuild cost to do with the sale value of a property? Answer is absolutely nothing.
If the house is worthless then it matters not a jot what it costs to rebuild it - the plot value *may* be of some interest but that is a far- fetched scenario.
I can. If the house is insured for £500K rebuild, but the actual rebuild costs are £600K (not totally implausible for a listed property), then the mortgage company will lose out if the house is burnt down.
(The word is "secured"). If a listed house worth £285K burns down, the resulting plot of land may (easily) have negative value. The cost of clearing the site + rebuilding the house can easily exceed the value of the resulting house. The mortgage company want to be sure that if that happens, the owner has sufficient insurance.
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