TL;DR: Home buyers protection insurance is a niche UK policy that reimburses the buyer's wasted conveyancing costs (legal fees, search fees, mortgage application fees, survey fees) if the property purchase falls through before completion through no fault of the buyer. The typical policy costs 50-90 pounds, covers up to 1,500-2,500 pounds of wasted costs, and is sold through some conveyancing solicitors, mortgage brokers and direct insurers. Common triggers include the seller pulling out, a survey revealing a major defect, a chain collapse, or a gazumping situation. The policy is generally optional, not always good value (most buyer purchases do complete), but can be worth considering for buyers with low cash reserves or those buying in volatile chains. It does not cover the buyer choosing to withdraw from the purchase voluntarily.
Last reviewed May 2026
Home buyers protection insurance (sometimes "purchase protection insurance" or "home buyer expense protection") is a UK insurance product designed for the period between an accepted offer and completion of a property purchase. Its purpose is to refund the buyer's costs (legal fees, search fees, mortgage costs, survey fees) if the purchase does not complete because of certain defined events outside the buyer's control.
This guide explains exactly what the policy covers, the typical premium and the coverage limits, the events that do and do not trigger a claim, the FCA framework that regulates the product, the alternatives (such as not buying the policy and self-insuring), and how home buyers protection insurance differs from related products like buildings insurance, contents insurance and mortgage payment protection.
What home buyers protection insurance covers
The standard policy covers the buyer's reasonable wasted expenses if the purchase does not complete due to a covered event. Typical covered events include: the seller withdrawing from the sale after an offer has been accepted; a chain collapse where another party in the chain pulls out; gazumping (the seller accepting a higher offer from another buyer after agreeing to sell to the insured); a survey identifying a major defect that materially reduces the property's value; or the mortgage lender withdrawing the offer due to a property-related issue (such as a down-valuation).
The covered expenses normally include legal fees and disbursements (search fees, Land Registry fees, bankruptcy searches), mortgage application and arrangement fees paid to the lender, survey fees (both the lender's valuation if separately charged and any independent buyer's survey), and electronic identity verification fees. The total covered is normally capped at 1,500-2,500 pounds depending on the policy level chosen.
The premium is normally a one-off payment of 50-90 pounds when the policy is taken out, with cover starting from the date of policy issue and running until completion (or until the policy lapses if the deal is delayed beyond a defined period, typically 6 months).
The events that do not trigger a claim
The most important exclusion is the buyer's voluntary withdrawal. If the buyer changes their mind, cannot get a mortgage offer due to their own income or credit issues, or wishes to negotiate a lower price after a survey but the seller refuses, these are not normally covered. The policy is designed for situations outside the buyer's control.
Other exclusions typically include: the buyer's failure to disclose material information at the time of taking out the policy; the buyer's failure to follow reasonable advice from solicitors, surveyors or mortgage brokers; pre-existing conditions in the property that were known or should have been known to the buyer; and claims arising from events more than 6 months after the policy was taken out.
The policy's specific terms vary by insurer. The Insurance Product Information Document (IPID) summarises the cover and exclusions and should be reviewed before purchasing. The full policy wording is the definitive document on what is and is not covered.
How the policy is sold and the FCA framework
Home buyers protection insurance is sold in three main channels: through conveyancing solicitors at the start of the conveyance, through mortgage brokers as part of the mortgage process, and direct to consumers through specialist insurers. Each channel has different distribution economics and different commission arrangements.
The policy is a regulated insurance product under the FCA's Insurance Conduct of Business Sourcebook (ICOBS). The seller (the conveyancer, broker or direct insurer) must give the buyer the IPID before sale, disclose any commission earned, and ensure the product is sold appropriately. The FCA's "fair value" rules require insurers to assess whether the policy provides fair value to customers, given the price, the cover and the likely claims.
Buyers can complain to the seller first and escalate to the Financial Ombudsman Service if the complaint is not resolved. The Ombudsman has heard a number of complaints about home buyers protection insurance over the years, with the outcomes generally turning on whether the specific exclusion claimed by the insurer was clear and applied to the facts.
Is it worth buying? The arithmetic
The decision turns on three numbers: the policy premium, the typical wasted costs in a failed purchase, and the probability of failure. A typical premium of 70 pounds covers up to (say) 2,000 pounds of wasted costs. The probability of a UK residential purchase falling through after an accepted offer is significant: industry estimates put it at 25-30 percent of agreed sales, though most fall-throughs happen early before significant costs are incurred.
The buyer's typical wasted costs vary by stage. Falling through after the survey but before exchange usually means costs of 1,000-2,000 pounds wasted (solicitor work, searches, survey). Falling through earlier is cheaper; falling through later (after exchange) does not happen without contractual consequences for one of the parties.
The arithmetic suggests the policy can be marginally worth it for buyers facing a high-risk purchase (a long chain, an older property with survey risk, a seller showing signs of cold feet). For buyers in stable circumstances with a short chain, the cost-benefit is less clear. Some buyers self-insure: setting aside the equivalent of a few policy premiums as a contingency fund covers the wasted costs in the rare case of a fall-through, with no policy fees in between.
Distinction from related insurance products
Home buyers protection insurance is different from buildings insurance (which covers damage to the property), contents insurance (which covers the buyer's belongings), title insurance (which covers defects in the property's legal title), and mortgage payment protection insurance (which covers mortgage payments if the buyer loses income).
Buildings insurance is needed from the date of exchange (when the risk in the property transfers to the buyer), not from the date of the offer. Most buyers arrange buildings insurance between exchange and completion. Contents insurance is typically arranged for the completion date, when the buyer's belongings move in.
Title insurance is a specialist product covering specific defects in the property's legal title that emerge after completion (typically used for older properties or where the conveyance identifies a specific risk that cannot be otherwise resolved). It is unrelated to home buyers protection insurance.
The policy in a chain context
The most common reason for a UK residential purchase to fall through is chain collapse: another party in the chain (the seller's onward purchase, the buyer's sale, the buyer's onward purchase) pulls out, and the whole chain unwinds. Home buyers protection insurance typically covers this: the insured buyer's wasted costs are reimbursed if the chain collapse is not the buyer's fault.
Longer chains (3 or more transactions) statistically have higher fall-through rates because any one party's exit can collapse the entire chain. Buyers in long chains may find the policy more valuable than buyers in short chains or chain-free purchases.
Some policies specifically include chain breakdown cover; others treat it as an extension. The IPID should make this clear. Buyers should also check whether the policy responds to a "buyer cold feet" scenario from someone else in the chain (where another party voluntarily withdraws), which is the most common chain failure mode.
Claim mechanics and payment timing
The claim process typically requires the buyer to notify the insurer of the failed purchase within a defined period (often 30 days), provide evidence of the wasted costs (invoices from solicitors, surveyors, mortgage brokers and any direct lender fees), and show evidence of the reason the purchase failed (correspondence with the seller, the surveyor's report, the lender's withdrawal letter).
Claim payment timing is generally a few weeks after submission. The insurer pays directly to the buyer or to the named professional service providers, depending on the policy terms. Claims are normally limited to the documented costs incurred, up to the policy's coverage cap.
Buyers should keep copies of all invoices and correspondence throughout the purchase process to support any potential claim. This is good practice regardless of the policy and can also help in disputes with service providers about the work performed.
How we verified this
This article reflects the FCA's Insurance Conduct of Business Sourcebook (ICOBS), the FCA's "fair value" rules under the Consumer Duty implementation from July 2023, the published IPIDs from the main UK home buyers protection insurance providers, and the Financial Ombudsman Service's published decisions on home buyers protection insurance complaints. Specific premium and coverage figures are typical market levels in 2026; individual policies vary by insurer.
Disclaimer: This article is general information about UK home buyers protection insurance and is not personal financial advice. The cost-benefit of the policy depends on the specific transaction, the chain, the property and the buyer's risk tolerance. Anyone considering the policy should read the Insurance Product Information Document, compare cover and price across providers, and consider whether self-insuring (setting aside an equivalent contingency) is more appropriate for their circumstances.
Frequently asked questions
What is home buyers protection insurance?
Home buyers protection insurance is a UK policy that reimburses the buyer's wasted conveyancing costs (legal fees, search fees, mortgage and survey fees) if a property purchase falls through before completion due to events outside the buyer's control, such as the seller pulling out, a chain collapse, a major survey defect, or the mortgage lender withdrawing the offer. The policy typically costs 50-90 pounds with cover up to 1,500-2,500 pounds.
Is home buyers protection insurance worth getting?
It depends on the perceived risk of the specific purchase. Industry estimates suggest 25-30 percent of UK agreed sales fall through, but most fall-throughs happen early before significant costs. A long chain, an older property with survey risk, or a seller showing signs of cold feet raises the case for the policy. Stable, short-chain purchases may not justify the premium. Some buyers self-insure with a contingency fund instead.
What does home buyers protection insurance not cover?
It does not cover the buyer's voluntary withdrawal, the buyer's failure to secure a mortgage due to their own income or credit issues, pre-existing property conditions known to the buyer, or claims arising from undisclosed information at the time of taking out the policy. It also typically does not cover events beyond a defined coverage period (often 6 months from policy start).
How does home buyers protection insurance differ from buildings insurance?
Buildings insurance covers physical damage to the property and is needed from the date of exchange of contracts (when risk transfers to the buyer). Home buyers protection insurance covers wasted purchase costs if the deal falls through before completion. The two are unrelated products, both potentially relevant in a UK property purchase but serving different purposes.
How do I claim on home buyers protection insurance?
The buyer notifies the insurer of the failed purchase within the policy's notification period (often 30 days), provides invoices showing the wasted costs, and evidences the reason for the failure. The insurer reviews the documents and pays the documented costs up to the policy cap, typically within a few weeks. Keeping copies of all transaction-related invoices and correspondence makes the claim straightforward.
