How the rising costs of materials impacts heritage property insurance

Insuring your heritage property - the rising price of heritage materials increases rebuild and repair costs of traditional properties by 3.4%. 

If you have a heritage property, you’ll know that the materials and craftsmanship needed to make repairs or alterations are far from ‘off the shelf.’ From an insurance perspective, it’s critical to make sure that your cover takes into account the distinct materials and skills that would be needed to reinstate your residence.

In 2018 Ecclesiastical introduced The Ecclesiastical Heritage Building Cost Index (EHBCI), specifically designed to track the costs associated with the reconstruction and repair of Britain’s traditional properties. This index continues to track above the General Building Cost Index (GBCI) and the rate of inflation (currently 2.1%). The provisional results show that prices of traditional building materials increased by 1.2% in the first three months of 2019 compared to the previous quarter (Q4 2018). 

“In the past we have had to reopen a quarry to source the correct stone to rebuild a property or employ specialist restoration experts to work on some of the more intricate features, so you can see how not having the correct sum insured could really impact on the ability to reinstate the property.”  

Sourcing and sustaining supplies of traditional materials such as handmade bricks is essential for the maintenance and repair of historic buildings. The index is designed to reduce the risk of underinsurance for owners of traditional properties (typically properties built before 1920 using traditional methods) throughout the term of their insurance policy.

The EHBCI shows that stone has seen the biggest price increase, with a 4.4% annual increase in price and 3.7% rise in the first quarter of 2019. This reflects a continuing trend over the past 10 years of rising stone costs. High demand for stone products is increasing prices as stone has returned to popularity in the construction sector. Many projects are incorporating stone features such as granite worktops, stone cladding to walls and stone paving. Major ongoing refurbishment projects such as the Palace of Westminster are also helping to drive demand for stone. 

Hardwood products and handmade bricks have also seen a rise as detailed below: 

Sarah Willoughby, Art and Private Client Business Director at Ecclesiastical said: “The EHBCI tracks the most common materials and skills needed to reinstate more traditional properties. The beginning of 2019 saw a slight increase, largely due to rising costs of raw materials such as handmade brick, hardwood and stone products. Tracking these fluctuations means our customers can be more confident that they will have the right sum insured throughout the life of their policy with us.” 

The Consumer Prices Index 12-month rate was 2.1% in April 2019, Office for National Statistics

Content courtesy of Ecclesiastical

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