Home owners could be in line to save money on the cost of their building insurance due to the downturn in the construction sector.

A new report by the Society of Chartered Surveyors (SCS) to be published shortly will show that the cost of rebuilding residential houses has fallen by between 4%-5% since May of last year.

This is largely attributable to falling prices within a construction sector which has been hit hard by the slowdown in the property market.

The guide, which the SCS publishes on an annual basis, is intended to be used as a reference tool for householders when calculating how much to insure their home for, should it be damaged or destroyed and need to be rebuilt or repaired.

Mortgage providers normally require this type of cover – which is separate to contents insurance – to be arranged as a condition of the mortgage.

The chairman of the SCS's Quantity Surveying division, Richard Mossop, told the Sunday Tribune that he could see "no reason" why insurance levels would not reflect the downward trend in rebuild costs.

"If the actuaries believe, and take a look out the window and see the market is decreasing in terms of rebuild costs, then the cost of insurance should drop too," he said. "It should come down. But whether the insurance companies do it is another question."

He made his comments after the prominent NUI Galway economist Dr Alan Ahearne expressed concern that many hard-pressed mortgage holders may be paying too much for their building insurance.

This is because the value of insurance they took out may have been based on out of date replacement costs for the property, which do not reflect decreased costs in recent months.

A spokesman for the Irish Insurance Federation said it was up to individual policyholders to decide how much they wished to insure their property for. This is typically done when the policy is due for renewal. "We would not say that people are overinsured. It is generally the policyholder's responsibility to set the sum insured," he said.