re-instatement cost assessment

Five factors affecting reinstatement costs of flats in London

Over and above the standard costs, BCH gives further consideration to the following 5 key factors when preparing a Re-instatement Cost Assessment in London or other urban areas.

No two properties are exactly the same. In London this is even more evident. With a wide variety of flats, be they purpose built or conversion, reinstatement costs will inevitably be different.

No two properties are exactly the same. In London this is even more evident. With a wide variety of flats, be they purpose-built or conversion, reinstatement costs will inevitably be different.

Although BCH values blocks of flats all over the UK, we see a high concentration in and around London. This has allowed us to develop an expertise in recognising specific factors that affect the reinstatement cost of an individual property.

The purpose of a Reinstatement Cost Assessment (RCA) is to ensure that in the event of a major insured incident, sufficient funds are available to rebuild the property to the same specification as existing. Over and above the standard labour and materials costs, BCH gives further consideration to the following 5 key factors when preparing an RCA in London or other urban areas.

1. The flats are in a listed or conservation area.

Flats insurance for a listed building
The cost to rebuild a listed building has an array of factors to consider.

An allowance for higher professional fees must be included. Skilled labourers, specialist architects, surveyors and consultants who focus on listed buildings will be required. Approval from a local authority and possibly English Heritage will be required. Key contractors may not be immediately available at the time of a loss.

The time taken to complete the reconstruction of a listed building will be longer due to the co-ordination of various professions, trades and the necessary permissions.

Maintaining the use of traditional materials and forms of construction will be a key factor here and is more expensive.

The site could be of archaeological interest or listed as high potential for new discoveries. Pausing works so that local authorities can carry out research could be a possibility.

Allowances must be made for compliance with current legislation such as Building Regulations.

2. The flats are in a prime central location

It is essential to make allowances for the location of a property. The fact is it costs more to rebuild in London than elsewhere in the country.

Inner London boroughs such as Westminster, Kensington and Chelsea and Camden, attract a premium and the same can be said for outer London boroughs such as Ealing and Richmond Upon Thames.

Currently, there are more billionaires in London than any other city in the world.

Improved confidence in the economy and property market, has seen an influx of overseas investment which has impacted the ‘Prime Central London’ location factor. Development is increasing which is pushing tender prices higher.

The profile of a client has now to be considered. Seeking perfection and flawless finish takes longer to achieve and inevitably contractors price their fees accordingly.

Other factors such as the congestion charge, which has been uplifted twice since 2009, should not be overlooked.

3. Site factors

flats insurance site factor
Restricted access and other site factors are a key consideration.

Restricted access is evident all over urban areas and dramatically increases the costs of working and the necessary application of the Party Wall Act. Many properties have no direct access to the rear façades and access over neighbouring properties would need to be sought.

A site with limited or no space for working or storage of materials during reconstruction may require specialist scaffolding or temporary work lifts over pavements etc. The suspension of parking bays for loading/ unloading and locating of skips can cost £10,000s.

Proximity to railway lines, rivers, canals etc. may require deeper foundations, extra damp proofing, or further consideration to type of materials and construction technique used.

For retaining abutting neighbouring properties, temporary works such as bracing, propping or façade retention may be required. This may also include the retention of neighbouring boundary walls and other external items.

Further consideration must be made for lateral extensions/ flying freeholds into/ over/ under neighbouring properties; making sure that the structure of the building above/ below your property is not forgotten. For example, the policy may only include the 1st, 2nd and 3rd floors of a building, but the ground floor still provides support for the upper floors. Likewise, the roof covers the ground floor as well as the upper floors, so apportionment is necessary.

Certain areas and roads in London apply restrictions on working hours. This will affect scheduling and time on site which would be more costly.

4. Internal and external features

flats insurance architectural features
Consideration should be given to architectural features and included in the reinstatement cost assessment.

Some properties in London, although not listed or located within a Conservation Area, are saturated with internal and external period features. Ornate and decorative features cost more to reconstruct because of the materials and specialist labour required.

Items such as stone, lead, stucco rendering, bespoke cast iron and wrought ironwork are just a few features that are prevalent in London. The difference between building in simple brickwork and stone could be an increase in the cost of as much as 50%.

Some buildings may have a plain façade but reveal an abundance of features internally. Items impacting the RCA significantly are stone cantilevered staircases with ornate wrought iron balustrades, passenger lifts with original iron cages, cornicing and ceiling details and terrazzo, marble and mosaic-tiled floors to name but a few.

Externally, features such as entrance porticos, balconies, window surrounds, pediments, band courses, chimneys and gables are common in London, as the majority of property in the central boroughs are of the Georgian, Victorian and Edwardian eras. Some external features, such as under-pavement stores are often overlooked.

In London, properties historically had one or two levels of basement and, with the boom in the creation of the ‘iceberg’ basements, one has to be prepared for surprises. A feature such requires more excavation, deeper foundations, damp proofing and highly engineered retaining walls; all increasing the RCA.

5. Commercial aspects

Flats insurance with commercial aspect
Many flats have a commercial unit, for example, a shop as part of the block will impact the cost to rebuild.

A large proportion of residential blocks that BCH is instructed to assess include commercial units.

On occasion, the commercial aspect is actually insured on a different policy but consideration still needs to be given as, if for example, it sits beneath your block of flats, allowances will need to be made within the RCA for its structure as it supports the building above.

With commercial aspects present, VAT will need to be addressed. In the case of a block of flats with retail units on the ground floor, the rebuild cost of the flats would be zero-rated (VAT included on professional fees and demolitions only) whilst the shops would be standard rated, as commercial usage does not qualify for zero-rating.

If the property owner is not VAT-registered, the commercial part of the building will be subject to VAT, which will need to be added to the rebuild calculation.

BCH has the experience and knowledge to ask questions of the freeholder and tenant to ensure that the correct allocations for fixtures and fittings are included within the Re-instatement Cost Assessment.

If you have concerns about the insurance valuation for a block of flats please call Barrett Corp & Harrington on 01455 293510.

Valuation survey for Passivhaus new build

Building a Passivhaus standard property comes at a higher cost compared to standard build house and these factors to be taken into account

A building which has been designed to comply with Passivhaus principles.

Q: Why did you choose this building Richard?

A: This new build property built in a rural area in the county of Berkshire and has been designed to comply with Passivhaus principles, resulting in a low energy consuming property built with the latest low carbon emitting materials and services.

Q: What are the differences between this property and any other standard construction property?

A: Most modern standard properties are built to a level which runs on a value engineered approach, achieving perhaps only the minimum standards of heat losses and energy usage to keep initial costs low. This property has taken an opposite approach, where heat losses and energy usage have been put above an initial financial outlay.

Q: How does this affect the valuation and rebuild cost?

A: Building a Passivhaus standard property comes at a higher cost compared to standard build house. For an accurate insurance valuation unique factors need to be taken into account, including the different materials being used, such as highly insulated walls, roofs and floors; all using an eco-friendly Hempcrete material, air tight windows and doors and even recycled plastic roof tiles!

On top of all of these features you may also find higher labour rates, where a specialist team may need to be involved. All of which could lead to an overall cost per metre of around £3500 compared to a standard cost of around £1000 for a standard new build property.

Surveyor, Richard Payne.

Q: What do you do when you are not working?
A: When I’m not out and about on the roads of the UK visiting these varied and interesting properties I can be found hopelessly following my favourite team Portsmouth Football Club, followed by a brisk jog on the seafront or canal side to forget our latest result.

BAPS Shri Swaminarayan Mandir demands unique valuation survey

BAPS Shri Swaminarayan Mandir in Neasden - London

A self-load-bearing building…

Why did you choose this building Jackie?

Having a great love of all things Indian and having visited many historic temples across India and South East Asia it had never occurred to me that it would be possible to find an equal in the suburbs of North West London.

This exquisitely carved Hindu temple of pure marble and limestone is as beautiful as anything to be found in the Indian sub-continent, and is in fact only 21 years old, every square inch hand carved by craftsmen to a breath-taking degree of detail.

But where to find the sheer number of craftsmen needed to undertake such a project, and moreover to complete it in 3 years from start to finish? Some of the blocks of marble were sourced in India, much in Italy, and together with the Bulgarian limestone used for the exterior of the building, all were transported to 14 different sites across India, there being hand-carved by more than 1,500 skilled craftsmen, before being shipped back to England and assembled on the site that was already being prepared.

Buildings insurance valuation for religious temple
The Haveli features impressive expanses of intricately carved teak

The large majority of the workers were volunteers, both in India, and in London, where the final construction and assembly of the Mandir was completed over a two year period. The Mandir was opened in August 1995 by His Holiness Pramukh Swami Maharaj alongside the Haveli, a 10,000 square metre Hindu cultural centre, this building featuring equally impressive expanses of intricately carved teak…but that would need to be the subject of another article!

From a reinstatement cost assessment point of view, this created a very unique challenge – to ascertain how much it would cost to rebuild using the same degree of Hindu craftsmanship, only to be found in India, but on a more commercial basis, i.e. paid, as opposed to voluntary, labour. All elements had to be brought into the equation – costs of raw stone, shipping costs to and from India, Indian labour costs, accommodation and labour costs of craftsmen living temporarily in London….and so on!

For me it was the perfect combination of a fabulous building and a challenge to really get my teeth into!

What would be the key concerns about rebuilding in this location?

The usual issues associated with rebuilding in this location, particularly such as cost of labour and materials which are higher in London than average for the country as a whole, did not really apply to this build as so much was voluntary, and the materials sourced from abroad.

In an insurance rebuilding situation however, where paid local tradesmen would be used for all of the construction other than the stone carving, it would need to be factored in. More specifically however, the site itself is large and level, with plenty of working space around the buildings. There is a good road network with easy access from the North Circular Road and it is not a conservation area, so there are minimal extra contingencies to be added to the basic build costs.

Any interesting facts about this building?

The Mandir had to be built to conform to India’s ancient architectural texts known as the Shilpa Shastras, and as such there is no structural steel support or reinforcement in the building.  This created a big challenge to ensure the building was entirely self-load-bearing and at the same time meeting British building regulations.

If you could survey and building, which would you choose?

I think it would have to be the Potala Palace in Tibet, with its incredible views of the Himalayas.  As rebuilding challenges go, this enormous palace and Buddhist place of worship, built at 3,700m and designed to be earthquake proof, yet still architecturally beautiful, has to be up there as one of the greatest.

Surveyor of the month, Jackie Schüpp.

Jackie Schupp BSc (Hons) Dip Cons Hist Env Cert CII MRICS

Q: What do you do when you are not working?

A: Travelling anywhere, whenever possible, with or without my husband and kids in tow!

Otherwise, I am involved with my local theatre group, usually to be found propping up bits of scenery or painting signs, with occasional forays into the acting side of things.

Am also learning Italian!

Tackling Twickenham – assessing the cathedral of rugby

We have assessed quite a few stadiums at BCH I would love to try and tackle the home of English Rugby.

This cathedral of rugby has evolved over time with improvements, enhancements and the odd conversion.

(No penalties for the puns please)

Q: Why did you choose this building?

A: We have assessed quite a few stadiums at BCH, but I would love to try and tackle the home of English Rugby, and if anyone there is listening and there’s an offside chance, I’m available for a site visit on Saturday 11th March around 4pm – me and 82,000 others! This cathedral of rugby has evolved over time with improvements, enhancements and the odd conversion to become the fourth largest stadium in Europe.

Q: What would be the key concerns about rebuilding here?

A: It would be a tough challenge although access from all flanks would assist, the sheer scale of rebuilding this fortress would cause a ruckus and delays could have a knock on effect.

Q: Interesting fact about this building?

A: The pitch is still in the exact the same place as it was in 1909 and though the grass has been re-laid many times since and is now one of the most advanced pitches in the world, the earth beneath is still the old dirt dug out from the Metropolitan Line.

Q: If you could survey and assess any building in the world, which would you choose?

Apart from Twickers? For something similar and closer to my roots, Croke Park, but for something very different, St Basil’s Cathedral.

Q: What do you do when you are not working?

A: Mainly family time with my two young daughters although I also follow Arsenal and Leicester Tigers, play guitar and tinker with my motorbikes. I’m also a qualified artistic gymnastics coach and help out at a local academy.