Why is my reinstatement cost higher?

After taking a quick look at various property forums, we came to a point that the main concern of the new property owners is the reinstatement cost. If you are one of those people who are looking for buying real estate then you might be carrying out various surveys in order to find the best possible property for you. There are a few factors that are needed to be considered, whenever a person is thinking to purchase a property. As for the main factors are concerned, there are two of these, one is the costof the reinstatement and the other one is the market value of the property.

One of the frequent questions that the property purchaser would ask you is “Why the reinstatement cost of the home is higher than the market value of the property?

It is worrisome, and in some cases creates a panic. But, we assure you that it is totally fine and many owners of the property are facing the same issues. So what does it actually refer to?

 What is actually meant by a reinstatement Cost?

You ought to keep reading the article if you do not have any idea of the reinstatement costs. In case your house is destructed due to some kind of incident, for instance,the fire then obviously there is a need to build it again. The insurance company is going to ask you that how much loss you have suffered. The cost of reconstruction of your house. Now, understand the reinstatement cost by this that it is the cost of reconstruction of the property back to its original state.

The main focus of this article is on why the cost of reinstatement is always high? Let’s answer this one in depth.

Why the cost of reinstatement is higher always?

It means that you are rebuilding your house to its original state. In order to do this, you need to make sure that all the things such as material are the same as before. Unsuitable material such as asbestos shall not be used, and quality alternatives need to be utilized. The price of these quality materials rises with the passage of time so it might cost you more than the price in which the home was originally constructed. The same goes for the costs of labor, everything changes over time.

Most probably, the cost of material and labor increases. In some cases there is a need for experts, specialized equipment’s in order to speed up the job, maybe that option or technology was not available in the past. Not only this, there are certain additional costs such as the tradesman, insurance, health and safety that you might not have to consider decades ago.

So when all of these various costs are combined, it is like you are building the house all over again from the scratch. We can say that this is the reason which makes reinstatement costs higher. There are times, when the reinstatement costs are higher than the market value of the property.

In case you want to, get in touch with us to take the advice from a top quality surveyor.