People buying or rebuilding a home may be paying more than they’d expect for the location of their property, new research indicates.
A study from Compare The Market aimed to ascertain how much of the overall cost of a property is made up by the cost of the building itself and how much the property is affected by the surrounding land and area mark-up.
The study researchers compared estimated rebuild costs with actual property values across the UK. The rebuild cost of a home is the estimated value of rebuilding a home from the ground up, including costs of materials and specialist labour.
London was predictably the most expensive location to live in the UK, with Londoners shown to pay around £330,000 for the location of their property. The average property price in the English capital is £618,065, while the average rebuild cost is £286,819, with a location price of £331,246.
This location price was nearly twice as high as the average £179,204 location price for a home in the South West, the second-most expensive property location in the UK.
In Scotland it was actually more expensive to rebuild a home than buy a new one, by £41,229. The study authors speculated this comparatively low location price in Scotland could be because of older buildings requiring specialists materials and labour which are harder to source, or changing markets over time.
|Yorkshire & The Humber||-£18,568|
The Self Build Alternative
The findings are pertinent for those considering moving or rebuilding homes as location may have a significant impact on your budget.
Self building can help swerve steep location prices on properties, avoiding additional costs on top of construction, plumbing and electrical equipment, labour and materials. Self build homes can be achieved through a variety of build costs, with land costs varying across the UK.
As a warning to those searching property locations to buy a home, Compare The Market said on their website: “Potential homebuyers need to consider their investment carefully – and focus on the location they’re thinking of buying, regardless of whether they’re buying for themselves or to let.”