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.
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.
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.
Who Should Get Home Buyers Protection Insurance?
There’s a wide range of people who can benefit from Home Buyers Protection Insurance including:
First time buyers
Home movers
Buy to Let investors
Second home buyers
What is the cost of Home Buyers Protection Insurance?
The cost of Home Buyers Protection Insurance starts at £69. There is no excess to pay.
Here’s what’s included in the different types of Home Buyers Protection Insurance cover and how much each package costs:
Standard Home Buyers Protection Insurance– Costs £69. Includes cover for conveyancing fees (£750), survey and mortgage valuation fees (£500) and mortgage arrangement & lender fees (£250). Plus, gazumping protection, if the offer accepted is at least £1000 higher than yours. You’ll pay no excess and the policy will cover 120 or 180 days.
Plus Home Buyers Protection Insurance– Costs £139. Includes cover for conveyancing fees (£1500), survey and mortgage valuation fees (£750), mortgage arrangement & lender fees (£250), storage & accommodation (£300), mortgage broker fees (£200). Plus, gazumping protection, if the offer accepted is at least £1000 higher than yours. You’ll pay no excess and the policy will cover 180 days.
Premier Home Buyers Protection Insurance – Costs £189. Includes cover for conveyancing fees (£2000), survey and mortgage valuation fees (£1000), mortgage arrangement & lender fees (£350), storage & accommodation (£300), mortgage broker fees (£350). Plus, gazumping protection, if the offer accepted is at least £1000 higher than yours. You’ll pay no excess and the policy will cover 180 days.
When should you buy your Home Buyers Protection policy?
If you decide you would like to buy Home Buyers Protection insurance to protect your purchase, the time to buy the insurance is once your offer on a property has been accepted in writing. This is usually once you have received the memorandum of sale. You need to buy the insurance once you have an accepted offer and within 14 days of formally instructing your conveyancing solicitor or submitting your mortgage application and before carrying out a house survey. It is best to take the insurance out before spending money on expenses so these are covered.
Home Buyers Protection Insurance vs. other home insurance types
Home Buyers Protection Insurance is different from other types of insurance you’ll need as a homeowner. Here’s how they compare:
Home Buyers Protection Insurance: This helps cover legal, survey and mortgage costs you’ve paid if your purchase falls through.
Buildings insurance: This covers the cost of repairing or rebuilding of your house, in case there is major damage, such as a fire or falling tree.
Contents insurance: This covers damage or loss of contents, such as furniture or jewellery, in the case of fire, theft or even accidents.
Key Benefits of HomeOwners Alliance Home Buyers Protection Insurance
Home buyers 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: Standard, Plus and Premier. The below table shows you the level of cover each package provides so you can decide which will 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
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 (Property agents Quick Move Now put the fall through rate in Q3 2024 at 29%).
Common reasons for a purchase falling through include:
Gazumping: This is when a seller accepts a higher offer from another buyer after agreeing a sale with you. Gazumping can happen at any time before you exchange contracts, causing wasted costs on surveys and legal fees. Research from Market Financial Solutions found that 38% of homebuyers have been gazumped in the last decade.
Housing chain collapses: If one link in the housing chain collapses, this can cause multiple deals to fall through.
Down valuations: When you’re buying a house with a mortgage, the lender will have a mortgage valuation carried out. And if the surveyor decides the property is worth less than you’ve agreed to pay for it, this is called a down valuation. If this happens, the lender may offer to lend you a lower amount or refuse to lend.
Rectification work is required to the property by the mortgage lender.
Seller changes their mind: Until contracts are exchanged the buyer or seller can pull out for any reason, including simply changing their mind and deciding not to sell.
Survey identifies major issues: If a bad house survey report reveals issues like subsidence or damp, the buyer may choose to pull out, especially if the seller won’t renegotiate the sale price.
Change in buyer circumstances: Job relocation, redundancy, or health issues may lead to the buyer withdrawing.
Legal problems: Issues such as boundary disputes or problems with property titles can cause complications.
Buyer can’t get a mortgage: The buyer may not be able to secure a mortgage, even if they have a mortgage in principle in place.
Conveyancingdelays: If it’s taking a long time to get to exchange of contracts, the buyer or seller may decide to walk away. There could be delays in getting local authority searches back or delays could be cause by the buyer, seller or their conveyancers taking a long time to reply to enquiries.
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 type: The property must be in England, Wales or Northern Ireland and be a permanent construction. Plus, the policy holder must be over 18 years of age. You must also use a solicitor or licensed conveyancer to conduct the conveyancing of the property.
Timing: You cannot be reimbursed for costs incurred before the policy start date. You must not have had a survey carried out on the property before the policy start date. You’ll also not be covered if you deliberately cause a delay which caused the house purchase not to complete.
Purchase type: The purchase of the property must not be subject to a contract race or sealed bids. Best and final offers fall within the same category as sealed bids.
Knowledge of problems: You won’t be covered if you knew that the house purchase would not complete before you bought Home Buyers Protection Insurance. Or 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.
General exclusions: You won’t be covered if withdraw from the house purchase for reasons not covered by the policy (you can’t just change your mind for instance), where you are able to obtain a refund on your fees, or 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 2024 is just over £975 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.
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.
Here are answers to frequently asked questions asked by people who have applied for home buyers protection insurance. These are meant as general guidance when purchasing the insurance but terms and conditions can apply, so you should check the full policy wording prior to purchase.
Frequently Asked Questions:
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 if I have a ‘mortgage in principle’?
Getting a mortgage in principle is different to making a mortgage application. A mortgage in principle is an indication that a lender could lend you a specified amount, based on details you’ve provided about your income, spending and debt. You can get a mortgage in principle at any time and it’s advisable to get one before you start house-hunting so that you can show estate agents you’re a serious buyer.
However, you can only make a full mortgage application once you’ve had an offer accepted on a house. And you can take out Home Buyers Protection Insurance as long as your application is made within 14 days of applying for a mortgage.
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 report 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.
What about a property that is repossessed or I’m buying it at auction?
No – if you’re buying a repossessed property or at auction where you are required to complete within 28 days, 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 first purchase 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.
Can you buy Home Buyers Protection insurance as a limited company?
Yes. you can buy the policy as a limited company. When you complete the online form to purchase the insurance, select ‘No’ to the first question on the application, ‘Is there a joint applicant purchasing the property with the main policyholder?’, the next question will then appear as ‘Is the property to be insured under this insurance be in the name of a company?’, to which you can select ‘Yes’ and input the company name.
Yes. With 1 in 3 property purchases falling through, Home Buyers Protection Insurance allows 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.
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.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners
Alliance is not intended as a recommendation or financial advice.
Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath
BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate
most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your
mortgage.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of Seopa Ltd, for home insurance,
authorised and regulated by the Financial Conduct Authority (FCA FRN: 313860).
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed
Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN:
656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent
financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
