Home buyers protection insurance, also known as home buyers insurance or gazumping insurance, is a one-off policy that can refund certain upfront costs if your property purchase falls through for reasons outside your control. These costs typically include conveyancing fees, house survey fees, search fees, and mortgage-related charges. The goal is to reduce the financial stress of a failed transaction and provide reassurance during the home buying process.
This guide explains how home buyers protection insurance works, what it covers, common reasons property sales collapse, and how it fits alongside services like No Sale No Fee conveyancing. Remember that either the buyer or seller can pull out of a house sale or purchase at any point before they exchange contracts in England and Wales. In Scotland, however, they are only able to pull out of a property sale before the conclusion of missives.
This guide is for general information only and is not financial or insurance advice. Insurance products are usually offered by companies that are authorised and regulated by the Financial Conduct Authority (FCA). Always read the policy documents carefully and consider speaking to a professional adviser if you are unsure.
Why Do Property Sales Fall Through?
Around a third of UK property sales fall through before completion, often leaving buyers out of pocket after paying for conveyancing work, surveys, and mortgage fees. Deals collapse for many different reasons, and insurance providers typically base their cover on these scenarios.
Here are some of the most common causes:
1
Gazumping
Gazumping happens when a seller accepts your offer and later accepts a higher offer from another buyer. While frustrating, it is completely legal in England and Wales until contracts are exchanged. Home buyers protection insurance is often referred to as gazumping insurance because many policies allow claims when this happens.
2
A Break in the Property Chain
Chains rely on multiple linked transactions. If just one sale collapses, it can disrupt the entire chain, causing delays or forcing every buyer and seller involved to start again.
3
Buyer or Seller Changing Their Mind
Until contracts are exchanged, neither party is legally committed. A seller may withdraw, or a buyer might decide not to proceed due to personal or financial reasons.
4
Issues Found in Survey Report
Surveys commonly highlight structural problems, damp, subsidence, roof damage, or other costly issues. They may also flag concerns about building regulations compliance where alterations or extensions have been carried out without the right consent. If the findings are serious, the buyer may negotiate the house price after the survey, and the sale may fail if agreement cannot be reached.
5
Difficulty Securing a Mortgage
Even with a Mortgage in Principle, lenders can decline an application after assessing the property or buyer’s affordability. Down valuations, when a lender values the property below the agreed price, are also common reasons a sale cannot continue.
6
Price Negotiation Failures
If a survey uncovers costly problems, buyers often try to reduce the agreed price. If the seller refuses, the sale may fall through.
7
Delays in the Conveyancing Process
Conveyancing normally takes 8–12 weeks, but delays in searches, enquiries, or paperwork can cause buyers to lose confidence and withdraw. If you are buying a property in a mining area, additional searches could be needed which would further delay the conveyancing process.
Policies vary between insurers, but most cover a similar set of upfront costs when a sale fails for a valid reason under the policy. Standard cover often includes:
Conveyancing fees
Survey fees
Search and valuation fees
Mortgage arrangement or lender fees
Some comprehensive policies may also include extras such as mortgage broker fees, temporary accommodation, or storage costs. Claim limits apply to each category and to the total amount you can reclaim.
This insurance is paid as a one-off premium and covers you for a fixed period, often up to 180 days, depending on the insurer and product.
How Much Does Home Buyers Protection Insurance Cost?
Costs vary by provider and cover level. As an example, Rhino Home Protect advertises cover from £79, with a higher-cover option advertised at £154. Other insurers may price differently depending on limits and exclusions, so check the policy wording before you buy. If you are using a solicitor when buying your house, they could offer recommendations on home buyers protection insurance.
Remember: home buyers protection insurance is different from indemnity insurance or standard home insurance. It is specifically designed to help cover upfront purchase costs that are lost when a sale falls through.
Home Buyers Insurance Comparison
Here is a simple overview of how levels of cover typically differ across insurers. Figures are representative, not tied to any one provider:
Feature
Typical standard policies
Higher-cover options
Conveyancing / legal fees
Up to £750
Higher limits may be available
Survey or valuation fees
Up to £500
Higher limits may be available
Mortgage arrangement or lender fees
Up to £250
Higher limits may be available
Gazumping protection
Usually included
Usually included
Covered reasons for claim
Sale falls through for a valid insured reason
Wider insured scenarios may apply
Policy length
120–180 days (typical)
Often longer or until exchange
Are There Limits to the Amount You Can Claim?
Yes. Insurance providers set maximum claim amounts for each category. Based on industry averages, you’ll often see limits in the region of:
Up to £750 in legal fees
Up to £500 in survey or valuation fees
Up to £250 in mortgage-related fees
Higher-tier policies often allow claims for larger amounts. Check the provider’s policy wording for full details.
Home Buyers Protection Insurance Restrictions
Policies include strict eligibility rules. Common restrictions include:
You must take out the policy after your offer is accepted
You cannot have already instructed a survey
Costs incurred before the policy starts will not be covered
The purchase must not involve sealed bids or contract races
You must use a licensed conveyancer or solicitor
You won’t be covered if you simply change your mind or knowingly proceed with a high-risk purchase
Voluntary redundancy claims are typically excluded
You can buy this insurance directly from specialist providers or through comparison tools. To ensure you choose the right cover, check:
What scenarios are covered
Individual and total claim limits
Policy length
Eligibility rules and exclusions
Whether gazumping protection is included
Keep all receipts and invoices, as insurers usually require them when assessing claims.
Do You Need Home Buyers Protection Insurance If You Use a No Sale No Fee Conveyancer?
Not necessarily. A No Sale No Fee service covers your solicitor’s legal fees if the transaction collapses, but it does not protect you from search fees, survey fees, valuation fees, or mortgage fees.
Home buyers protection insurance may still be helpful if you want cover for these extra costs.
Frequently Asked Questions
Most insurers require you to wait until your offer is accepted. Policies are usually purchased before searches or surveys are carried out and within a specific timeframe after instructing a conveyancer or submitting a mortgage application.
Usually not. Most providers will not cover costs incurred before the policy begins or properties where a survey has already taken place.
Most policies only cover residential properties in the UK.
Typically 120–180 days, depending on the insurer.
Some providers may allow extensions, but it is not guaranteed.
No. Home buyers protection insurance protects costs if your purchase falls through. Home insurance typically includes buildings insurance and contents insurance, protects the property and your belongings once you own the home.
Find a Conveyancer
If you’re looking to hire a conveyancing solicitor to assist you with your house purchase, we can help. Here at Konnect You, we can match you with up to 5 conveyancers in your local area. Simply fill out our quick form to speak with local conveyancing solicitors today.
