What is home buyers protection insurance?

Home buyers protection insurance is designed to help cover the costs you lose if your house purchase falls through unexpectedly. It can be a real lifesaver if things go wrong during the buying process – and unfortunately, they often do.

Whether the seller changes their mind, the property is taken off the market, or you’re gazumped by someone else, this type of insurance means you won’t be out of pocket for upfront costs like legal fees, surveys and mortgage expenses.

It’s a one-off policy you take out when you're buying a home, and it protects you for a set period – usually until completion or for a certain number of months. While it can’t stop a sale from collapsing, it can take away some of the financial sting if it does.

What do I get with home buyers protection insurance?

This insurance typically reimburses you for the costs you’ve already paid out if your property purchase falls through for a covered reason. It may be particularly useful in England and Wales, where offers aren’t legally binding until contracts are exchanged.

Home buyers protection insurance policies may be more affordable than you think, too. They tend to cost somewhere from £70 upwards, depending on the provider and the level of cover. Considering how much you could claim back, it’s often seen as a sensible one-off cost during the buying process.

Most policies include refunding conveyancing and survey fees, but some also go further. They may cover lender-related charges, local authority searches, and even some storage or temporary accommodation costs if your sale collapses at the last minute.

Depending on the policy, you can typically claim for:

  • Solicitor or conveyancing fees.

  • Survey or valuation costs.

  • Mortgage arrangement or lender fees.

Some policies also pick up additional costs, such as:

  • Temporary storage or accommodation if you’ve already sold and the purchase collapses.

  • Coverage if you are gazumped with a higher offer.

  • Mortgage broker fees.

Of course, each policy is different. Limits and covered events vary, so make sure to check the terms carefully. That way, you’ll know exactly what you’re protected against, and won’t be caught off guard if things don’t go to plan.

Exclusions and things to consider

Home buyers protection insurance is really useful – but like all insurance, it comes with a few conditions and exclusions. Of course, terms vary between providers, but here’s some things that might apply:

Where and what you’re buying

Insurers will cover certain locations, for example England, Wales or Northern Ireland, and the type or property.

You’ll need a solicitor

You must use a licensed solicitor or conveyancer for conveyancing.

Policy timing matters

You won’t be reimbursed for anything paid before the policy started or if a survey was already done before cover began.

Certain purchases aren’t covered

Properties bought via sealed bids, contract races or best and final offers may fall outside cover.

No cover for known issues

If you already suspected the sale might fall through, or there was a recent survey raising red flags, you typically won’t be able to claim.

As you can see, it’s important to check what is and isn’t covered so there are no surprises if you ever need to make a claim.

How likely is it that a house purchase will fall through?

Buying a home might seem simple: make an offer, get it accepted, job done… right? Sadly, not quite. According to HomeOwners Alliance, around 1 in 3 property purchases fall through – so there's a real risk things won’t go to plan.

There are all sorts of reasons deals collapse before exchange – many of them totally outside your control. Here are some of the most common ones:

  • Gazumping: Another buyer swoops in with a higher offer, and the seller takes it.

  • Gazundering: This is when you lower your offer just before exchange, and the seller walks.

  • Chain collapses: If one buyer or seller in the chain drops out, everyone else can be affected.

  • Down valuations: The lender’s survey says the home’s not worth what you offered, so they offer less (or not at all).

  • Lender demands repairs: If the property needs work, the lender may refuse to lend until it’s sorted.

  • Seller pulls out: People can simply change their minds before exchange, and they often do.

  • Bad survey report: Major issues like damp or structural problems might scare the buyer off.

  • Buyer's life changes: Things like job loss, relocation or illness can cause buyers to back out.

  • Legal issues: Disputes over boundaries, rights of way, or dodgy deeds can delay or derail a sale.

  • Mortgage troubles: Even with a mortgage in principle, a buyer might not get final approval.

  • Delays: If things drag on for too long, one side may just give up and walk away.

With so many moving parts, it’s easy to see why home buyers protection insurance can be such a smart move. It helps soften the blow when plans fall apart, and protects the money you've already spent.

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Answering your questions about home buyers protection cover

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Page updated on 5th November 2025, Reviewed by Richard Groom