Buying a Property with a Restrictive Covenant

At Towerstone, we provide specialist property accountancy services for homeowners, landlords, and property investors. We have written this article to explain how restrictive covenants affect ownership, helping you make informed decisions.

Buying a house with a restrictive covenant can sound worrying, especially if you come across the term for the first time during the conveyancing process. Many buyers fear it means they will not truly own their home, or that they will be constantly at risk of legal action for doing something wrong. In reality, restrictive covenants are very common, particularly in older properties and on modern estates, and many homeowners live with them for decades without any issue at all.

That said, some restrictive covenants are more serious than others, and a small number can materially affect how you use, alter, or even sell the property in the future. The right decision depends on what the covenant says, how enforceable it is, and what you want to do with the property.

In this guide, I will explain clearly what restrictive covenants are, why they exist, the types you are most likely to encounter, the risks involved, and how to decide whether buying a house with a restrictive covenant is sensible for you.

What is a restrictive covenant?

A restrictive covenant is a legal promise written into the title of a property that restricts how the land or building can be used.

In simple terms, it is a rule that says you must not do certain things with the property.

Restrictive covenants are binding on future owners, not just the person who originally agreed to them. This means that when you buy a property, you inherit any restrictive covenants attached to it.

They are different from planning rules. Planning permission comes from the local authority. Restrictive covenants are private legal agreements, usually created when land was first sold or developed.

Why do restrictive covenants exist?

Restrictive covenants were historically used to control how land was developed and used, long before modern planning systems existed.

Common reasons include:

Preserving the character of an estate

Preventing nuisance or undesirable uses

Protecting the value of neighbouring land

Controlling development on newly sold plots

On modern housing estates, developers often use restrictive covenants to maintain uniformity and protect future sales.

On older properties, covenants may date back many decades, sometimes over a century.

How common are restrictive covenants?

Restrictive covenants are extremely common.

Many properties have at least one, particularly:

Victorian and Edwardian houses

Properties on former estates or large landholdings

New build homes

Houses on private roads or managed developments

In most cases, homeowners are unaware of them because they never breach them.

The presence of a restrictive covenant alone is not unusual and is not, by itself, a reason to avoid a property.

Typical examples of restrictive covenants

Not all restrictive covenants are the same. Some are minor and outdated. Others can have real consequences.

Common examples include covenants that restrict building extensions or additional structures, prevent the use of the property for business purposes, ban keeping certain animals, require consent for alterations, limit the property to residential use only, prohibit subdivision of the land, or restrict parking of caravans or commercial vehicles.

Some covenants are very specific, others are broadly worded.

Understanding what the covenant actually says is far more important than the fact that one exists.

Restrictive covenants vs planning permission

One of the biggest misunderstandings is assuming that planning permission overrides restrictive covenants.

It does not.

You can have full planning permission for an extension and still be in breach of a restrictive covenant if the covenant prohibits that type of development.

Planning law and restrictive covenants operate separately. You must comply with both.

This is why restrictive covenants matter most to buyers who plan to alter or extend a property.

Are restrictive covenants legally enforceable?

Some restrictive covenants are enforceable. Others are effectively obsolete.

Whether a covenant is enforceable depends on several factors, including who has the benefit of the covenant, whether that person or body still exists, whether the covenant still benefits the land it was intended to protect, and whether it has been breached repeatedly without objection.

A covenant written in 1890 may still exist on the title, but if there is no identifiable party who can enforce it, the practical risk may be very low.

Your solicitor’s role is to assess this risk, not just point out the covenant exists.

Who can enforce a restrictive covenant?

Only the party with the benefit of the covenant can enforce it.

This might be:

A neighbouring landowner

The original developer or their successor

A management company

A private estate owner

If there is no clear beneficiary, enforcement becomes unlikely.

However, where there is an active management company or a neighbour who clearly benefits, enforcement risk is higher.

What happens if you breach a restrictive covenant?

If a restrictive covenant is breached and enforced, the consequences can be serious.

Potential outcomes include:

A court injunction forcing you to undo the breach

Legal costs and damages

Difficulty selling the property

Problems with mortgage lenders

For example, being forced to remove an extension after it has been built is rare, but it does happen in serious cases.

That said, enforcement action is far less common than people fear, particularly for minor or historic covenants.

Restrictive covenants on new build estates

New build properties almost always come with restrictive covenants.

These often include rules about:

External alterations

Extensions

Satellite dishes

Parking

Fencing and boundaries

Use of the property

On modern estates, these covenants are often actively enforced by management companies, particularly in the early years.

If you buy a new build, you should assume covenants are real and enforceable.

Restrictive covenants on older properties

Older properties often have restrictive covenants that reflect a very different era.

Examples include bans on running a trade from home, restrictions on building additional houses, or requirements to use specific materials.

Many of these are rarely enforced today, especially where surrounding properties have clearly breached them without consequence.

However, assumptions are dangerous. Each covenant must be assessed on its own facts.

Should you be worried if you do not plan to change anything?

If you intend to live in the property as it is, and have no plans to extend, alter, or change its use, restrictive covenants are often a low risk issue.

Most disputes arise when someone wants to:

Build an extension

Convert a loft

Run a business

Change boundaries

Subdivide the land

If none of these apply, the covenant may never affect you in practice.

What if you want to extend or alter the house?

This is where caution is required.

If the restrictive covenant restricts building or alterations, you need to consider:

Whether consent can be obtained

Who grants that consent

Whether consent involves a fee

Whether consent has been given previously for similar works

Some covenants allow alterations with written consent. Others ban them outright.

Your solicitor should investigate whether similar properties have extended without issue.

Can restrictive covenants be removed or changed?

In some cases, yes, but it is not simple.

Options include obtaining consent from the beneficiary, applying for indemnity insurance, or applying to the Upper Tribunal to have the covenant modified or discharged.

Tribunal applications are expensive, slow, and uncertain. They are rarely practical for normal homebuyers.

Indemnity insurance is far more common.

What is restrictive covenant indemnity insurance?

Indemnity insurance is often used where a covenant exists but the risk of enforcement is considered low.

This type of insurance does not remove the covenant, but it protects you financially if enforcement action is taken.

Key points include:

It is usually a one off premium

It often costs a few hundred pounds

It must usually be arranged before any breach occurs

It does not allow you to knowingly breach a covenant

If you contact the beneficiary to ask for consent, indemnity insurance may no longer be available.

This is a critical point many buyers miss.

How do lenders view restrictive covenants?

Mortgage lenders are very familiar with restrictive covenants and rarely refuse a mortgage simply because one exists.

However, lenders may require:

Confirmation that the covenant does not materially affect value

Indemnity insurance in some cases

If a covenant seriously restricts use or development, lenders may be cautious.

Your solicitor will usually liaise with the lender if an issue arises.

Will a restrictive covenant affect resale?

In most cases, no.

Many buyers accept restrictive covenants as normal, especially on estates or older properties.

Problems arise if:

The covenant has been breached

There is an ongoing dispute

The covenant significantly limits use

If the covenant has not caused issues during your ownership, it is unlikely to affect resale materially.

Common mistakes buyers make with restrictive covenants

Some common errors include ignoring the covenant entirely, assuming planning permission solves everything, contacting the beneficiary without advice, breaching the covenant deliberately, or panicking and walking away from otherwise suitable properties.

Restrictive covenants should be understood, not feared.

Questions you should ask before deciding

Before deciding whether to buy a house with a restrictive covenant, ask yourself:

What exactly does the covenant restrict? Who can enforce it? How likely is enforcement in practice? Do I plan to do anything that might breach it? Have similar properties breached it without issue? Has my solicitor explained the real risk, not just the existence?

Clear answers to these questions usually bring clarity.

When a restrictive covenant should be a red flag

There are situations where caution is justified.

These include covenants that are actively enforced by a management company, covenants that directly prevent your intended use, recent enforcement action in the area, or covenants tied to neighbouring land where disputes already exist.

In these cases, walking away may be sensible.

When a restrictive covenant is usually acceptable

In contrast, many covenants are harmless in practice.

These include very old covenants with no clear beneficiary, covenants that reflect current use, covenants that are routinely breached nearby, or covenants that only restrict unlikely activities.

These are part of everyday property ownership in England and Wales.

A practical way to think about restrictive covenants

A useful way to frame it is this:

A restrictive covenant is not about whether you can buy the house, but about whether the house fits your future plans.

If your plans align with the restrictions, the covenant may be irrelevant.

Final thoughts

Buying a house with a restrictive covenant is not automatically a bad idea. In fact, most homeowners already do, whether they realise it or not. The key is understanding what the covenant actually restricts, how likely it is to be enforced, and whether it conflicts with how you want to use the property.

Restrictive covenants become a problem only when they are ignored, misunderstood, or breached without thought. With good legal advice and a clear view of your intentions, most restrictive covenants are manageable and pose little real risk.

If in doubt, the right approach is not to panic or dismiss the issue, but to get clarity before you commit. In property, knowledge is almost always the best protection.

If you would like to explore related property guidance, you may find should i buy a house with flying freehold and should i buy a house with possessory title useful. For broader property guidance, visit our property hub.