Since becoming a Director of BCH, Mark has been instrumental in the ongoing development of BCH, its relationship with its clients and the progression of its staff and processes whilst navigating the challenges of the pandemic.
Looking to the future, Mark plans to increase awareness of the life-cycle of a compliant Reinstatement Cost Assessment, continue to grow and develop our national team of Building Insurance Surveyors and ensure that in an evolving industry BCH’s services maintain the excellent standards established over its 15 years.
The reinstatement value of your property forms the basis of your building’s insurance cover.
The reinstatement value of your property forms the basis of your building’s insurance cover. If this figure is wrong, then you may find your insurance policy will not respond in the way you expect in the event of a major loss.
Barrett Corp & Harrington provides information to help policyholders insure for a realistic figure.
The figure we recommend is the bedrock to ensuring that the clients’ needs will be met and that they have got what they paid for in their insurance policy.
One or more of the following may explain why the recommended sum has changed:
A reinstatement cost assessment has not been undertaken for at least 3 years or not at all:
If the current insurance value is based on a guesstimate, its provenance is unknown, or it has not been valued for a long time, chances are it is now inadequate. Our assessment brings the value back into alignment with current construction costs and trends.
Indexation applied has not kept pace with costing ‘hot spots’ such as London and the South East or is adequately reflected the impact of building regulations requirements:
The Building Cost Information Service (BCIS) publishes national indices used by insurers. Typically insurers take the national average to index the value on a policy. Being an ‘average’ this is not always appropriate and, over time, can accumulate to a significant difference.
Reliance placed on an out of date mortgage valuation or market value:
Recommended reinstatement values found in mortgage, bank and development appraisals are often found to be lacking and based on a best estimate at the time, along with associated caveats and recommendations for a full assessment. Worse still, the value may have been linked to the market value, which is not related to the insurance rebuild cost.
The insurance value was based on the original developers own build cost or excluded VAT:
These values are often historic and don’t include the cost of the team needed to redesign and supervise reconstruction.
They often don’t include a main contractor’s profit or demolition costs either and may not have included the appropriate VAT liability.
There are extensive external works, outbuildings, hard and soft landscaping:
These costs are often overlooked as the concentration is on the building itself.
External works including tarmac roads, paths and parking, all of which add significantly to the overall rebuild cost should be included within the insurable amount.
The building is on an unusual or restricted site with access and working space issues:
For example, in a city centre, adjacent to a railway line, a restricted position such as pedestrianised high street, a remote location that is only accessible via a weight-restricted bridge or narrow country lanes.
These factors can complicate a rebuild, which in turn means higher building costs.
There has been extensive refurbishment, renovation or ‘green’ upgrades:
If there has been any extension, refurbishment or alteration works, or works that include green retrofitting of renewable and sustainable energy systems, then the sum insured may not have been altered to reflect these works at the time they were completed.
The building is listed or in a conservation area:
These buildings and/or their specific locations are of particular architectural interest. Special permission is required before any works are carried out, and consultants specialising in historical preservation may need to be engaged. Time delays, due to periods of consultation, inevitably impact on the reinstatement cost assessment.
The building was constructed before 1920:
Reinstatement cost assessments allow for a replacement building to be constructed in similar materials and using sympathetic methods. Due to building regulations, further interventions may also be needed e.g. the addition of appropriate foundations and fire protection. This is why we find older buildings are often underinsured.
The building is constructed of unusual or expensive materials, such as stone:
A combination of material costs and specialist labour costs makes these buildings more expensive to construct. Local quarries may have closed and sourcing alternatives could be costly.
Have you got a question about your property insurance valuation? Call the BCH Office on 01455 293510 or contact us by email. We look forward to hearing from you.
Site-specific factors that impact reinstatement cost assessments.
Why did you choose Penton Park?
I chose this building as we constantly come across legacy properties that are diversifying their use to make the building more self-sufficient.
In this instance Penton Park is used primarily as a family dwelling however the family are utilising the large reception rooms to host weddings, company conferences and private parties. www.pentonpark.co.uk
Select week days the property also opens its doors as ‘James’s Place’ to the disabled community and offers support whilst teaching new skills such as growing plants, art and working with animals. www.james-place.co.uk.
What would be the key concerns?
In terms of a rebuild cost assessment this property has a wealth of additional period features, as you would expect with a Grade II listed property of this era.
External details including the pediment gable would all be additional costs to the external envelope and are valued as such.
Additionally, internal finishes are measured, photographed and valued individually. This is imperative for an accurate valuation. For example, there are a number of ornate fire places within Penton Park and they have to be valued individually.
The property continues to benefit from renovation and refurbishment and e.g. the original servants quarters have yet to be restored. Therefore the ‘one price fits all’ certainly isn’t applicable here.
As the property has a lower ground floor with windows, there are retaining walls running adjacent to the external walls on some elevations. These have to be measured for length and height and valued too. Site specific features such as these can add significantly to the overall value of the assessment.
Penton Park stands in ample grounds so in the event of a rebuild there would be no concern with space for plant, storage of materials, site waste management plan and site welfare.
Access to a property is always something to be taken into consideration as problems with access can increase costs. Here, there are two access points. The north access is far from ideal as it is obstructed by a Grade II listed heritage boundary brick wall and to obtain access to the house via this route would necessitate deliveries from multiple smaller vehicles.
Thankfully, it had been shown in recent renovations, that access from the south was not an issue, as all manner of vehicles had successfully reached the house.
These site specific factors which impact the reinstatement cost assessment enforce the importance of bespoke assessments.
BCH Surveyor, Zoe Davenport.
Q: What do you do outside of work?
When I’m not travelling the country assessing a variety of interesting buildings I enjoy reading and working on small property developments of my own.
I also enjoy time at the gym and am currently in training for the Great South Run and a (walking) marathon for Cancer Research.
A: This apartment development is a prime example of the high standard of finish and ample amenities included within new block developments in central London. The detailing both internally and externally is fabulous and carrying out this appraisal was a real pleasure.
Q: What would be the key concerns about rebuilding here?
A: This development was completed in 2011 and is a new build, behind a listed facade that was retained from a 19th century development. The property is also located within a conservation area.
These factors have a significant impact on the reinstatement cost, primarily due to the number of specialists that would have to be involved in the planning stages in the unfortunate event of a loss. These factors also impact on the assumed build programme itself.
The specific location of a building is very relevant to calculating the sum insured. An open site will always be cheaper to work on than one that is surrounded by other buildings, roads or public spaces. Although there is a front courtyard to the building, there are 3 floors of parking and leisure space beneath it. In the event of a partial loss, it is unlikely this deck could hold the wealth of commercial vehicles and site welfare facilities required to clear site, store materials and rebuild; requiring other arrangements to be made.
In the event of a total loss, the entire substructure would have to be demolished, removed and rebuilt so there would again be no space for any of the plant required for the rebuild within the boundaries of the property. This is not unusual for central London properties and again, additional work permits must be considered, as must site waste management plans. All of these elements have significant impact on the potential rebuild period and the final Sum Insured.
Q: Was there anything unusual you discovered during your appraisal?
A: There were a large number of leisure facilities on site here. Additionally the block employs 19 full time staff and additional contract staff so there is a proportionally higher number of circulation spaces, offices and amenities to be valued, such as the gym, pool, sauna, treatment rooms and the like.
BCH Surveyor, Zoe Davenport
Q: What do you do when you are not working?
A: Presently the renovations of my own home take up a lot of my spare time. In August 2014 I took part in a Tough Mudder and I’m currently in training to complete a number of charity sports events throughout 2015, though I aim not to do a Tough Mudder again. I enjoy sailing and am fortunate to live in close proximity to the new Ben Ainsley Racing team HQ, so will be looking forward to Big Ben bringing the Americas Cup home to Britain!