A to Z: Glossary of Property Terms

Moving house is always filled with lots of property jargon. If you’re buying your first house, or if it has been a few years since you last moved, it can be difficult to remember what it all means. At easyProperty, we’ve got you covered. Here are all the terms you will need to know to get through your move.

 

A

Advance – another way to describe your mortgage loan.

APRC – Annual Percentage Rate of Charge. This means the total cost of the credit to you as an annual percentage of the total amount of credit. It includes interest and other charges.

Approved in Principle / Agreement in Principle – a certificate that some lenders will give you to show the amount they will be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.

 

B

Balance Outstanding – the amount left owed on a loan at any given time.

Boundaries – these indicate the extent of the property and are usually marked on the ground by fencing or hedging. Always check exactly where these are if a property comes with land.

Bridging Loan – this is a temporary loan that helps you to buy a new property before your existing home has sold.

Buildings Insurance – a useful type of insurance that will protect your home if it needs to be completely rebuilt or repaired, such as from a flood or fire.

Buy-to-let – just as it sounds, this is when a landlord will buy a property to rent it to tenants. You will need a buy-to-let mortgage and check you have the correct buildings and contents insurance cover.

 

C

Caveat Emptor – this translates to ‘buyer beware’.  The buyer is responsible for finding out the condition of the property by survey and other enquiries, and any matters affecting the legal title to the property by having their legal representatives check the title and carry out searches.

Chain – the number of linked property sales where exchange of contracts must take place simultaneously.

Closing Date – sometimes there will be a closing date by which all interested parties must have shown their interest in buying a property

Commonhold – a rare way to own freehold land intended to overcome difficulties associated with leasehold ownership e.g. relating to shared facilities and obligations.

Completion Date – this is the exciting date when the completion of the legal transaction with all monies and documents has been distributed. This is when the seller’s solicitor will instruct the estate agent to release the keys.

Conservation Area – an area protected by the Local Authority. Properties in a Conservation Area may have extra planning restrictions, especially on the exterior of the property.

Contents Insurance – this type of insurance covers you against accidental damage or theft of all moveable contents, like furniture and appliances.

Contract – the formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale.

Conveyancer – a person other than a solicitor who may conduct the conveyancing.

Conveyancing – the legal work involved in buying and selling properties. It can get confusing, so make sure you have a great solicitor or conveyancer, and an estate agent to chase them about your purchase.

Council Tax – an amount of money paid monthly to the local council to cover the cost of local amenities and services.

Covenant – a condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant prohibits the owner from doing something.

 

D

Deeds – the legal documents that assigning ownership of a property or land.

Deposit – the amount of money that the buyer initially puts towards the purchase of the property.

Disbursements – fees usually paid via your solicitors such as Stamp Duty, Land Registry and search fees on top of conveyancing.

Discounted Variable Rate Mortgage – a set percentage discount below your lender’s Standard Variable Rate for a predetermined length of time. Your monthly payments can go up and down with this type of rate.

Draft contract – an initial contract which is edited to include the necessary information as required.

 

E

Early Repayment Charge – a charge made by the lender if the borrower terminates a mortgage before the time stated in the terms. This usually happens when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.

Equity – the difference between the value of a property and the amount of mortgage owed.

Energy Performance Certificate (EPC) – an EPC gives an energy performance rating for your home. It is a legal requirement when you sell your home. Ratings go from A (most efficient) to G (least efficient).

Exchange of Contracts – the point at which the sale becomes legally binding. After this, no party can withdraw without financial penalties.

 

F

Fixed Price – offers are invited at the price shown, rather than being open to offers.

Fixtures and Fittings – all non-structural items included in the purchase of a property.

Freehold – when the ownership includes both the property and land upon which the property is situated.

Full Structural Survey – this type of survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden.

Financial Advisor –the person responsible for arranging the mortgage or finance to purchase the property. They can also arrange any life insurance or mortgage protection insurance.

 

G

Gazumping – a seller and a buyer agree to an offer. But then a different buyer puts in an offer that is higher than the agreed offer. When the seller accepts this, it is gazumping.

Gazundering – when a buyer lowers their offer just before contracts are exchanged. This can threaten the whole sale.

Ground rent – the annual fee a leaseholder pays to the freeholder.

 

H

Higher Lending Charge – insurance to protect the lender from financial loss in case you fall significantly behind with your mortgage payments and your property is repossessed.

Home Buyers Report – a homebuyer’s report comments on the structural condition of most parts of the property, but does not involve in-depth investigation.

Housing Association – lets you buy a percentage of the property and pay rent on the rest.

 

I

Income protection – provides tax-free income in the event of you not being able to work due to ill health.

Instruction – when a seller instructs an estate agent to market a property.

 

J

Joint Agency – where two estate agents work together to market a property. Be aware of the possibility of having to pay two fees.

Joint Mortgage – a mortgage where there is more than one individual named responsible for the mortgage.

Joint Tenants – where two or more persons buy a property they are called joint tenants or tenants in common whether the property is Freehold, Leasehold or Commonhold.

 

L

Land Certificate – a Land Registry certificate proving ownership of property.

Land Registry –a government agency that holds the records of all registered property in the United Kingdom.

Landlord – the owner of the freehold interest of a leasehold property. Rent on a leasehold property is paid to the Landlord who has the right to enforce the terms in the Lease.

Lease – a Lease is a complicated document which details the matters affecting a Leasehold property.  These will include the length of the lease, rent, service charges, rights of way, water, drainage and access and it will usually incorporate a plan.

Leasehold – a Leasehold property is one which the owner will not own forever. The Lease grands the Leasehold owner the right to occupy the property or land and they may have to pay a rent to the Landlord.

Listed Buildings – Listed Buildings are protected by law. Properties that are Listed have strict planning restrictions.

Local Authority Search – application made to the Local Authority requesting details of any planning or other matters which might affect the property being sold.

 

M

Maintenance or service charge – the charge for the upkeep of a leasehold property, most common in blocks of flats or apartments.

Memorandum of Sale – a document that records the amount of money being paid for the property. It includes the names of both the property seller and buyer, and the name of the solicitors dealing with both parties involved.

Mortgage deed – a legal document relating to the Mortgage lender’s interest in the property.

Mortgage offer – a formal written offer from a bank or building society to lend an approved amount against a property.

Multi-Agency – the selection of two or more estate agents to act on the seller’s behalf. Be aware of the possibility of having to pay two fees.

 

N

Negative Equity – when the value of a property is less than the outstanding sum owed on a mortgage.

 

O

Offer – a non-legally binding bid made by a prospective buyer.

Offers Over – offers are invited above the price shown, rather than accepting all offers.

Ombudsman – independent professional bodies that investigate complaints on behalf of customers. If you have serious problems with a solicitor or estate agent, the Ombudsman can help.

 

P

Part-possession – when a tenant has legal right of occupation on a property that is being sold.

Premium – premium Payments to the insurance company to purchase cover.

Private Treaty – the way in which most house sales are completed in England and Wales.

 

R

Repayment mortgage – a mortgage where the monthly repayments include repaying the capital amount borrowed plus the accrued interest. The amount borrowed decreases until it has been fully repaid at the end of the loan term.

Retention – where the lender holds part of the mortgage advance back until specified repair works to the property have been completed.

Repossession – when payments aren’t made, the mortgage lender can repossess the property and sell it so they can repay the debt.

 

S

Sale Agreed – a verbal agreement from the seller that is not legally binding.

Sole Agency – instructing a single estate agent to act on the seller’s behalf. This will ensure that only one agent fee is paid on completion.

Solicitor – a legal expert that handles all documentation for the sale and purchase of a property.

Stamp Duty – a tax paid to the Government by the buyer upon completion. Click here to read our essential guide to Stamp Duty.

Standard Variable Rate – the interest rate set by the lender. It varies from lender to lender. Monthly payments will vary in line with lender rate changes.

Subject to Contract – also seen as ‘STC’. This means an agreement is not yet legally binding.

Survey – an inspection of the property from a qualified surveyor. There are three main types of survey: Valuation report (for mortgage purposes), Homebuyers report (also comments on general condition) and Full Structural survey (examines structural detail).

Surveyor – the person who is responsible for surveying a property. They are usually a member of the Royal Institute of Chartered Surveyors (RICS).

 

T

Tenants – people living in a property owned by someone else.

Tender – when the seller asks for written offers on a property, usually with a set closing date. When a property is sold by tender, the buyer pays the fees.

Title – the ultimate record of ownership of a property. You can find evidence of this in the title deeds.

Tracker Rate Mortgage – this type of rate is usually defined as a percentage amount above, below or equal to the Bank of England’s Base Rate. As the Bank of England can change rates at any time, your monthly payment can vary as your rate follows this base rate.

Transfer Deeds – the Land Registry document that transfers legal ownership from seller to buyer.

 

U

Under Offer – when the seller accepts an offer on the property, but contracts are yet to be exchanged.

 

V

Valuation – when an estate agent visits your property to assess the value. You can choose to instruct the agent based on this. Click here to invite easyProperty to a valuation of your home.

Valuation Fee – normally charged by the lender to carry out a basic inspection of the property. The resulting valuation report will allow the lender to assess mortgage suitability.

Variable Interest Rate – the rate of interest payment that fluctuates over time, in line with general interest rates.

Vendor – the legal name sometimes used to describe the seller of the property.

Verbal Offer – an offer from prospective purchaser that is not legally binding on either party.

 

W

Writ – the mode of commencing legal proceedings.

 

Zen – the feeling you get after you’ve moved with easyProperty. Click here to find out how to sell your home with us.