Around 1 in 4 property purchases fall through in England and Wales — often after you've already spent hundreds on surveys, searches, and solicitor fees. Homebuyer protection insurance reimburses those costs if the sale collapses through no fault of your own.
Key Points
Homebuyer protection insurance typically costs £50–£100 for up to £1,500–£2,000 cover
Does not cover: gazumping by itself, your own change of mind, or costs if you pull out
Available as a standalone policy or through your conveyancer/mortgage broker
Best taken out at the start of conveyancing — before spending on surveys and searches
About 300,000 transactions fall through each year in England and Wales
What Is Homebuyer Protection Insurance?
Homebuyer protection insurance (also called buyer's protection insurance or property purchase insurance) is a policy that reimburses the costs you've incurred during a property purchase if the transaction falls through before completion — through no fault of your own.
It's designed to protect against the financial losses buyers face when a sale collapses due to the seller pulling out, a failed survey, a mortgage refusal, or an issue revealed in the searches.
What Does It Cover?
Cover varies by insurer and policy tier, but most homebuyer protection policies include some or all of the following:
Cost Type
Typically Covered?
Typical Limit
Conveyancing / solicitor fees
✅ Yes
Up to £1,000–£1,500
Survey fees (Level 2 / Level 3)
✅ Yes
Up to £500–£750
Mortgage valuation fees
✅ Usually
Up to £300
Mortgage arrangement / broker fees
⚠️ Some policies
Up to £500
Conveyancing search fees
✅ Usually included in solicitor cover
Varies
Your own change of mind
❌ Not covered
—
Gazumping (seller accepts higher offer)
✅ If you've already spent money
Costs incurred only
When Can You Claim?
You can typically make a claim if the sale falls through because:
The seller decides to pull out or accept a higher offer (gazumping)
A structural survey reveals serious problems that make the purchase unviable
Your mortgage application is declined by the lender after valuation
The seller's title turns out to be defective and cannot be resolved
The property is damaged or destroyed before completion
Most policies require that you were not at fault — i.e. you didn't pull out voluntarily or fail to progress the purchase without good reason.
How Much Does It Cost?
Policy Tier
Premium
Cover Limit
Basic
£50–£65
Up to £1,500
Standard
£65–£85
Up to £2,000
Enhanced
£85–£120
Up to £2,500–£3,000
Given that solicitor fees alone can run to £1,000–£2,000 and a survey to £400–£1,200, a £65–£85 premium offers good value for most buyers, particularly in longer or more complex chains.
When Should You Take Out the Policy?
The earlier the better — ideally before instructing your solicitor or booking a survey, because most policies only cover costs incurred after the policy start date. If you wait until searches are completed or a survey is booked, those costs won't be covered if the sale then collapses.
How Does It Differ from Buildings Insurance?
Homebuyer protection insurance is specifically designed for the purchase process — covering wasted costs if the sale doesn't complete. It's different from buildings insurance, which covers the property itself from exchange of contracts onwards. You'll need both if you want full protection throughout the buying process.
Do You Need It?
It's not a legal requirement, but it's worth considering if:
You're buying in a chain (higher fall-through risk)
The property has known issues that might affect mortgage valuation
You're commissioning an expensive Level 3 structural survey
The seller has previously had a sale fall through
You've already had one purchase fall through and can't afford to lose more costs
For most buyers spending £1,000–£2,500 on pre-exchange costs, paying £65–£85 for protection is a reasonable safety net.
Frequently Asked Questions
Can I get homebuyer protection insurance after making an offer?
Yes — most insurers allow you to take out a policy after an offer is accepted, as long as you haven't yet spent money on surveys or solicitors. The policy covers costs incurred from the start date, so take it out before instructing anyone.
Does homebuyer protection cover gazumping?
Yes — if you've been gazumped (the seller accepts a higher offer after accepting yours) and you've already spent money on a survey or conveyancing, you can claim those costs back. The policy covers wasted costs, not the difference in purchase price.
Is homebuyer protection the same as indemnity insurance?
No. Homebuyer protection insurance covers wasted purchase costs if the sale falls through. Indemnity insurance covers specific legal defects with the property (e.g. missing planning permissions, lack of building regulations approval) and is usually taken out at completion.
Where can I buy homebuyer protection insurance?
You can purchase it directly from specialist insurers, through your conveyancing solicitor, or via your mortgage broker. Compare policies carefully — check the cover limits, exclusions, and claims process before buying.