Home Buyers Protection Insurance – Is it something I should consider?
Home Buyers Protection Insurance cover from just £69
Get Home Buyers' Insurance with Gazumping protection today
Buying a home is stressful enough without the financial worry of your purchase falling through. Home Buyers Protection Insurance also known as Gazumping Insurance helps cover legal, survey and mortgage lending costs should your purchase fall through.
What is Home Buyers Protection Insurance?
Home Buyers Protection Insurance can enable you to claim back some of your conveyancing fees, survey costs/mortgage valuation fees and mortgage/lender fees in the event of the purchase falling through. Our Home Buyer Protection costs just £69.
Home Buyers Protection Insurance, also called Home Buyers Insurance or Gazumping Insurance can protect you in the event of being gazumped, or if the seller changes their mind. It’s proving to be a popular product during an uncertain market with the increased risk of chains falling through.
With Gazumping Insurance protection, you are covered by the insurance if a higher offer undercuts your previously accepted offer on a property by £1000 or more.
What is the risk of a purchase falling through?
1 in 3 property purchases fall through
You find a house, make an offer that is accepted by the seller and then it’s yours, right? Buying sounds straightforward but approximately 1 in 3 property purchases fall through (source: Property agents Quick Move Now put the annual fall through rate in 2023 at 35%).
Common reasons for a purchase falling through include:
- The seller changes their mind and withdraws the property from sale
- Gazumping, 31% of UK homeowners have lost out on a property according MFS 2019 research
- The mortgage lender valuation is lower than the accepted offer
- The mortgage lender insists on rectification work
- The survey identifies necessary repair work
- The buyer withdraws due to a change in circumstance (such as job relocation or redundancy)
Key Benefits of HomeOwners Alliance Home Buyers Protection Insurance
Home buyer’s protection insurance needs to be bought prior to or within 14 days of notifying your solicitor/ mortgage lender of your purchase and before carrying out a survey. We have three home buyer protection insurance packages with different levels of cover to suit your needs:
| Insurance protection for: | Standard | Plus | Premier |
| Conveyancing fees | £750 | £1500 | £2000 |
| Survey and mortgage valuation fees | £500 | £750 | £1000 |
| Mortgage arrangement & lender fees | £250 | £250 | £350 |
| Storage & accommodation | – | £300 | £300 |
| Mortgage broker fees | – | £200 | £350 |
| Gazumping protection (if offer accepted is at least £1000 higher than yours) | included | included | included |
| No excess | no excess | no excess | no excess |
| Policy valid for | 120 or 180 days cover | 180 days | 180 days |
| Even covers VAT on fees | covers VAT | covers VAT | covers VAT |
| Policy cost: | £69 | £139 | £189 |
Protect yourself with Home Buyers Protection Insurance for just £69
Home Buyers Protection Insurance cover applies in these circumstances:
- The property owner withdraws the house from the market
- The property owner receives and accepts an offer which is at least £1,000 greater than the offer they have accepted from you
- Local authority search indicates the property is subject to a compulsory purchase order
- The vendor is not legally entitled to sell the property
- The mortgage property valuation is less than 90% of the accepted offer
- The mortgage lender applies a retention on the loan which is more than 10% of your accepted offer
- Rectification work is required to the property by the mortgage lender and the cost exceeds 10% of the accepted offer amount
- The property is damaged during the period of cover and it costs more than 10% of the property value to repair
- Redundancy or relocation of full employment (unless redundancy is voluntary)
Restrictions to cover:
- Property in England, Wales or Northern Ireland and be a permanent construction; policy holder must be over 18 years of age
- The purchase of the property must not be subject to a contract race or sealed bids
- You must use a solicitor or licensed conveyancer to conduct the conveyancing of the property
- You cannot be reimbursed for costs incurred before the policy start date
- You knew that the house purchase would not complete before you bought Home Buyer’s Protection
- You deliberately caused a delay which caused the house purchase not to complete
- You withdraw from the house purchase for reasons not covered by the policy (you can’t just change your mind for instance)
- You must not have had a survey carried out on the property before the policy start date
- You are aware of a previous survey having been carried out in respect of the property up to 90 days prior to the start date, that may give cause for the house purchase to fail
- Where you are able to obtain a refund on your fees
- In the case of redundancy, you took voluntary redundancy, are self-employed or a company director or partner of the company giving notice of redundancy
Get Home Buyers Protection Insurance with HomeOwners Alliance
Our Home Buyers Protection Insurance provides cover for conveyancing, mortgage and survey fees incurred by an insured purchaser when their purchase of a property falls through. The average claim amount in 2022 is just over £900 for home buyers who took out Home Buyers Protection Insurance with Homeowners Alliance and needed to make a claim.
With many reasons causing a property purchase to fall through, no one likes being left to foot the bill for the wasted costs. By reimbursing these fees, a purchaser who has Home Buyers Protection Insurance is provided with peace of mind should the purchase not go ahead.
Protect yourself with Home Buyers Protection Insurance for just £69
Home Buyers Protection – Am I eligible?
You should apply for Home Buyers Protection Insurance as soon as possible after deciding to buy a property as there are some steps in the home buying process after which, you will not be able to take out a policy. We cover these below.
Is it too late if I have already submitted my mortgage application?
You can take out cover as long as the application was submitted within 14 days.
What do you mean by mortgage application? I have an ‘agreement in principle’.
The mortgage application is the formal process of applying for the mortgage and can take a few weeks. An ‘agreement in principle’ can be issued by your lender within 24 hours and is helpful at the start of the process, when you are house hunting, as proof of funds.
I have already instructed my solicitor/ conveyancer, am I still eligible?
You can take out cover as long as the instruction to your solicitor was submitted within 14 days. If you instructed your conveyancer before your offer was accepted, you are eligible for cover within 14 days of acceptance of the offer.
Can I take out cover if I already have had a survey carried out?
Unfortunately, no.
Am I covered if I have a bad survey on the property?
Having a bad survey on its own does not meet an insured event and will not be covered. However, if the survey leads to an insured event being triggered eg. your mortgage application was subject to a satisfactory survey, mortgage valuation is less than 90% of accepted offer, then it will be covered subject to the policy terms and conditions.
Will the policy cover a new build property?
Yes
I’m buying a flat, can I take out cover?
Yes
Will you cover a buy-to-let property?
Yes
What about a property that is repossessed or I’m buying it at auction where I’m required to complete within 28 days?
No – due to increased possibility of the purchase failing from the limited time constraints, the policy is not suitable.
Am I covered for the deposit I have to pay to secure the property?
No
Can I transfer the cover to another property if the property I intend to buy falls through?
No – the policy only covers the property that you are buying at the onset.
I’m buying a property at auction – am I eligible for cover?
No – auction properties pose separate risks that Home Buyers Protection Insurance is not designed to cover.
Am I covered for legal fees on the property that I am selling, as well as, the property I am looking to buy?
No. The policy only covers costs related to the property that you are buying. You can purchase separate home seller’s protection insurance if this cover is required.
Protect yourself with Home Buyer Protection Insurance from just £69
Frequently Asked Questions
Home buyers protection insurance: is it worth it?
Yes. With 1 in 3 property purchases falling through, Home Buyers Protection Insurance will allow you to protect some of your hard earned money. It allows you to claim back a significant chunk of what you would have already spent on the cost of a house survey, the legal conveyancing and mortgage fees in the event your purchase falls through. It’s not a widely know product but everyone that finds it, wishes they’d have known about it sooner!
What protection policies do I need when buying a house?
As soon as you decide you want to buy a house, Home Buyers Protection Insurance in the first instance is a no-brainer. It will protect you against being gazumped, or if the seller simply changes their mind and decides not to proceed.
When buying a home you should also consider life insurance, mortgage protection insurance, income protection, critical illness cover, buildings insurance and contents insurance. Buying a house is the biggest investment you’re likely to make. Take the time to check you have the right level of cover for you and consolidate any existing policies.
Can a seller pull out of a house sale?
Yes. According to 2022 research by the House Selling Expert, the most common reason for a house sale falling through is a change of heart or circumstance. If you’re buying and the seller has pulled out before the exchange, this can leave you seriously out of pocket. Home buyers protection insurance from as little as £69 can significantly reduce your financial loss.
