You are here: Home - Insurance - News -

Insurance product recoups homebuyer costs in case of gazumping

Written by: Paloma Kubiak
If you’re concerned about gazumping or the vendor suddenly pulling out of a sale when you’ve already paid homebuyer fees, this insurance product could help you recoup the costs.

It’s every homebuyer’s nightmare – you are willing and able to buy a property, have an offer accepted, pay a surveyor and valuation fees, only to receive the unwelcome news that the vendor has changed their mind or accepted a higher offer.

According to research by campaign group Which?, around a third of recent home purchases have fallen through at an average cost to homebuyers of almost £3,000.

With this in mind, Canopius has launched a Home Buyer Fees insurance product to protect people against the loss of fees should a property purchase fall through.

Available through mortgage advisers, insurance advisers and IFAs, the residential insurance product costs between £49 and £67 (including the insurance premium tax IPT) depending on the level of cover selected.

It will insure someone in the following circumstances:

  • The vendor drops out for a reason beyond the control of the insured customer
  • The vendor is not legally entitled to sell
  • Compulsory purchase is revealed in the searches
  • The customer is given notice of redundancy
  • The customer or someone they are buying the property with dies following an accident.

However, it won’t cover you in the case of loss of fees where you are in a ‘contract race’ so you’re up against other buyers all competing to exchange contracts first.

Canopius said it covers lost or increased conveyancing, valuation and survey fees, plus mortgage and arrangement fees in the above instances.

Depending on the level selected, customers can receive up to £3,000 back in lost fees (gold cover) or £1,500 (bronze cover).

It’s a single use cover valid for six months and a stand-alone policy, so the cost won’t be added to your mortgage.

To make a claim, customers need to keep hold of their receipts to prove the loss suffered and Canopius said customers should receive the money within around 10 days.

Similar insurance products are already on the market but Canopius said it hopes to see sales volumes grow to 30,000 to 40,000 per year after the first two years of launch.

David Swan, head of mortgage, specialist consumer products at Canopius, said: “With a proportion of UK house purchases collapsing even after offers have been accepted, we are pleased to offer homebuyers indemnity against the loss of fees in this increasingly common circumstance.

“The product is extremely cost effective, provides certainty for buyers at an emotionally and financially vulnerable time and enables them to acquire their new home without incurring any unnecessary expense in lost fees.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
older borrowers
Children and pensioner poverty levels rise

The UK has seen a significant rise in the number of children and pensioners living in poverty over the past...