What Happens If My Builder Goes Bust During a Loft Conversion?

A builder ceasing trading partway through a loft conversion is one of the situations homeowners worry about most, and for good reason. Construction insolvencies have affected thousands of UK homeowners in recent years, often mid-project, with deposits paid and work half-finished.

What actually happens if it occurs? Without any protection in place, a homeowner is typically left as an unsecured creditor of the insolvent business, meaning recovering a deposit or the cost of finishing the work can be slow, uncertain, or unsuccessful.

Where an insurance-backed guarantee has been arranged before the contract started, the position is different: cover is provided independently of the contractor's own solvency, for the specific elements set out in the guarantee schedule — deposit, work-in-progress, materials, and workmanship. See our FAQ for the exact limits on each.

The key word is "before." A guarantee arranged after problems have already started isn't the same product, and most guarantee schemes, including this one, require protection to be in place from the outset.

If you're appointing a contractor for a loft conversion, ask the question early: is this project protected by an insurance-backed guarantee, and can you see the policy document?