This article has been provided by Association panel consultant, Rebuild Cost Assessment Ltd, a rebuild cost consultancy, to share with our members, particularly those that are responsible for listed buildings.
Would your insurance policy fully restore your listed almshouse if it had to be rebuilt exactly as it stands today?
Rebuilding must often be carried out “like-for-like”, using traditional materials and specialist craftsmanship. This makes accurate insurance far more complex and far more important.
Why listed buildings cost more to rebuild
Unlike modern properties, listed buildings are subject to strict conservation requirements. If damage occurs, repairs must typically match the original design, materials, and construction methods. That can mean sourcing specific stone, using lime mortar instead of cement, or employing skilled craftspeople such as stonemasons or heritage carpenters.
These requirements significantly increase costs. Materials are often scarce, labour is specialist, and projects take longer to complete. In some cases, rebuilding costs can far exceed what the property might sell for on the open market.
This is where many charities encounter risk.
Rebuild cost is not market value
Market value reflects land, location, and demand. Insurance, however, is based on rebuild cost, which is the total cost of reinstating the building, including demolition, professional fees, and compliance with current regulations.
For listed almshouses, the difference can be substantial. Relying on market value or outdated estimates can leave a property significantly underinsured.
The impact of underinsurance
Recent data from RebuildCostASSESSMENT.com (RCA) shows that 70% of UK properties are underinsured. For listed properties specifically, that rises to 78% underinsured. On average, underinsured buildings are covered for just 67% of their actual rebuild cost.
This becomes critical when the “average clause” is applied. Most building insurance policies include this condition, which reduces a claim in proportion to the level of underinsurance.
For example, if a building is insured for £1,000,000 but the true rebuild cost is £1,500,000, it is only insured for 67% of its value. A £300,000 claim could therefore be reduced to £200,000, leaving a £100,000 shortfall.
For a charity, that gap can be difficult to absorb and may delay or limit reinstatement.
Why sums insured fall behind
Even when cover was once accurate, it can quickly become outdated. Construction costs continue to rise, and listed buildings are particularly sensitive to increases in specialist labour and materials.
Works to improve energy efficiency or maintain heritage features can also increase rebuild costs. If these changes are not reflected in the sum insured, underinsurance can develop over time.
Practical steps for almshouse charities
- Obtain a professional rebuild cost assessment for listed properties
- Review valuations regularly (at least every three years, or after major works)
- Ensure the sum insured reflects specialist materials, labour, and professional fees
- Do not rely on index-linking alone to maintain accuracy
For listed almshouses, getting the sum insured right is essential to protecting both the building and the residents who rely on it.
Almshouse Association members receive preferential rates at RebuildCostASSESSMENT.com using code *Almshouse20*.
posted 6 May 2026
Click to access the full list of Almshouse Association panel consultants. It is important that members satisfy themselves that the services, qualifications and relevant membership of professional bodies meet their particular needs.
The Almshouse Association Property and Development team
We are delighted to share that two exceptional volunteers have recently joined our property support team.
As listed and older buildings become increasingly costly to manage, yet remain vital to the communities they serve, we are especially fortunate to have the support of two highly experienced property volunteers.