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What is Home Buyers Protection Insurance?

Adele MacGregor

Written by Reviewed by Gareth Brooks

19th Jul 2021 (Last updated on 2nd Jan 2024) 6 minute read

Home Buyers’ Protection Insurance is designed to protect home buyers, and their money, during the buying process. When it comes to buying a home, the costs involved go beyond the initial deposit and can quickly add up. But what happens if the purchase falls through after you’ve spent money on mortgage fees, a survey and a conveyancing solicitor?

By having Home Buyers’ Protection Insurance in place, you could recoup some of the funds lost. This is the insurance you will need if you are concerned about being gazumped or the seller changing their mind before the sale is completed.

  1. How Does It Work?
  2. What is the Risk of a Purchase Falling Through?
  3. What is the Cost of Home Buyers’ Protection Insurance?
  4. What Does It Cover?
  5. What Does It Not Cover?
  6. How Long Does Home Buyers’ Protection Last?
  7. How Do I Claim?
  8. Is It Compulsory?
  9. No Sale No Fee Conveyancing
  10. Learn More About Conveyancing

How Does It Work?

Buying a home is very often as stressful as it is exciting, with multiple costs to consider. According to our research, the cost of buying a house based on the current average property price in the UK is £30,271. This includes mortgages fees, conveyancing costs, surveying, removals and Stamp Duty.

Be aware that Home Buyers’ Protection Insurance is not the same as Indemnity Insurance. Home Buyers’ Protection Insurance helps cover legal and surveying costs, in addition to mortgage lending fees in the event the purchase falls through.

What is the Risk of a Purchase Falling Through?

According to property buying company Quick Move Now, almost a third (32%) of property sales in England and Wales fell through before completion in the first quarter of 2021. There are a number of reasons why a property sale might fall through, from a seller changing their mind to an issue on the property survey.

Quick Move Now reported that 25% of sales fell through after a buyer failed to secure a mortgage and that gazumping played a part in 25% of failed sales. Below we look at the main reasons why a property purchase might collapse before completion:

A Break in the Property Chain

A property chain is a line, or “chain” of buyers and sellers linked together because their property transactions depend on each other. Delays can impact the entire chain and even cause sales to fall through. A sale falling through in one part of the chain can also cause other sales to collapse.


Gazumping is when a seller accepts a buyer’s offer, and then accepts another, usually higher off, from another buyer. Although different in Scotland, this is entirely legal in England and Wales. When a buyer is gazumped, they lose out on the property they wanted to buy, and this can happen after paying out for mortgage and conveyancing fees and surveying costs.

Seller Changed Their Mind

Sometimes the seller can simply change their mind about selling the property and withdraw from the sale, leaving you back at square one with your house hunting and sometimes, out of pocket.

Issue Found in Survey

In the event a serious and costly concern is found during the property survey on the home, a buyer may pull out of the purchase causing the sale to collapse. This could be anything from damage to the roof, an infestation of Japanese Knotweed or a severe case of damp.

Difficulty Securing a Mortgage

If a prospective buyer is denied a mortgage, which can happen even if they have a Mortgage in Principle, the sale cannot go ahead unless they are able to purchase the property without a mortgage.

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What is the Cost of Home Buyers’ Protection Insurance?

Prices will vary between insurance companies but you can expect to pay in the region of £50- £95 for standard cover.

Providers on this insurance may offer a standard cover and a "premium" cover. Standard cover will protect up to a certain amount of funds. Premium cover will be more expensive but will cover you for a larger amount of money if the sale falls through. Be aware that the insurance covers up to a certain amount and may not cover the total amount spent.

What the insurance includes will depend on the provider but they will likely cover the following:

  • Conveyancing fees
  • Survey costs
  • Mortgage fees

Home Buyers’ protection insurance is a one-off premium. This means you pay for the insurance in one payment which will cover you for the duration of the policy.

What Does It Cover?

Home Buyers’ Protection Insurance covers you for some of your conveyancing fees, survey and valuation costs and mortgage fees if the purchase falls through after you have paid out these expenses. You will be covered for events such as:

  • Being gazumped - when the seller accepts a higher offer from another buyer
  • If the seller pulls out of the sale
  • If there's a break in the property chain
  • If the property is subject to a compulsory purchase order
  • The property valuation is less than 90% of the accepted offer

Be aware that there may be limits on the amount you can claim back, for example, some insurance providers will cover conveyancing fees up to £750, mortgage fees up to £250 and survey or valuation fees up to £500.

What Does It Not Cover?

Policies will differ between insurance companies but as a rule, the insurance will not cover any costs paid out before the policy was in place.

You will also not be covered if you change your mind about buying the property. The policy only covers events outside of your control that causes the sale to collapse.

There are some caveats to keep in mind with this insurance:

  • You must not have had a survey on the property before the policy start date
  • You must have instructed a solicitor or licensed conveyancer
  • The property purchase must not be subject to a contract race of sealed bids
  • If it is not valid if you knew the purchase would not complete before taking out the insurance

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How Long Does Home Buyers’ Protection Last?

Typically the insurance policy will last from 120-180 days from the day you buy the policy, therefore you would want to complete your purchase before the end of the policy to ensure you are covered for the duration of the buying process. This time scale may differ between insurance providers.

How Do I Claim?

To make a claim, contact the insurance company you took out the policy with. You will need to quote your policy scheme reference number and schedule number which will have been given to you when you took out the policy.

Home Buyers’ Protection Insurance usually comes without excess, so you won’t need to worry about paying out to claim. Check your policy details to be sure this is the case with the policy you have chosen.

Is It Compulsory?

Unlike Buildings Insurance, Home Buyers’ Protection Insurance is not compulsory. However, with the costs of buying a house in mind, it may be worth considering when entering into a property purchase.

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No Sale No Fee Conveyancing

Much like Home Buyers’ Protection Insurance, No Sale No Fee Conveyancing is designed to protect the buyer financially during the property buying process. No Sale No Fee Conveyancing is an agreement from a conveyancer which means if the purchase of the property falls through, you won’t have to pay their legal fees. .

Be aware that this does not mean that you will not incur any costs if the sale fails to complete. Any costs from third parties incurred on your behalf, for example for searches and surveys, will need to be paid to your conveyancer regardless of the outcome of the sale.

As it only covers the conveyancing costs, No Sale No Fee Conveyancing isn’t fully an alternative to Home Buyers’ Insurance Protection. It is also worth noting that No Sale No Fee Conveyancing can often be more expensive than using a traditional conveyancing solicitor.

Learn More About Conveyancing

This is part of our conveyancing guide. In our next article, we take a look at conveyancing options online. To learn more read what is online conveyancing.

Adele MacGregor

Having worked at Compare My Move for over five years, Adele specialises in covering a range of surveying topics.

Gareth Brooks

Reviewed by Gareth Brooks

Solicitor and Partner, RMNJ Solicitors

With 19 years of experience in the residential conveyancing industry, Gareth Brooks is a partner and head of management for the conveyancing department at RMNJ Solicitors.

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