Bricks and mortar account for only 59% of a property’s market value, Direct Line Select Premier Insurance has found.
Some two fifths (41%) of a property’s value, approximately £114,000, was derived from factors such as; the quality of local amenities, transport links and schools, as well as demand for homes in the area.
The average house price of £277,608 is 59% higher than the projected rebuild cost of a similar property, which is valued at £164,000.
The cliché of “location, location, location” appears most apt in the capital, where homeowners typically spend an average of over £647,000 for a three-bedroom property, more than three times the average rebuild cost of £205,000.
The property premium (£442,571) is in fact so vast, it is higher than the average market value of homes across the UK.
After London, Brighton has the second highest location premium, with residents on the south coast paying more than double the estimated rebuild cost to purchase a property in the city.
This is followed by Bristol, Edinburgh and Norwich, all of which have location premiums of 60% or higher.