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They have advised that 'the deed of release is in all likelihood releasing covenants and would not create any news ones and therefore we are not prepared to provide an indemnity policy'
if an indemnity policy is required in respect of a missing deed it is customary for the sellers to pay for it. If however the seller doesn’t think it’s necessary, they can refuse to do so.
If the seller is adamant that they will not pay for this missing deed indemnity (which is not expensive, probably £100/£200) you only have two options and they are that you get yourself and pay for it yourself or that you walk away from the property and lose the purchase.
By the same token, the seller loses the sale and they are faced with finding another buyer.
Whilst the solicitor says that the deed of release is in all likelihood releasing covenants doesn’t create new ones, he doesn’t know that unless he has the deed and therefore in circumstances like this, even though the chances are that he is correct, he cannot absolutely guarantee that and therefore I would insist on the deed or walk away (unless you want to pay for it yourself of course).
Can I clarify anything else for you?