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.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

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.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week