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  • Alaine Bradbury

Property Buzz Words Explained



I know I can be guilty at time of speaking too ‘property’. I blame it on my life long career choice of working with Solicitors, Builder, Mortgage Brokers and of course Estate Agents.




To be fair there’s a lot of jargon. If you’re not familiar with the language or terms here’s a few property terms explained;


Acceptance - Usually issued by lenders, acceptance is a document buyer’s need to sign in order to ‘accept’ the lender’s mortgage offer


Additional Mortgage Security Fee - a one-off premium which is paid to a broker up-front, commonly when the loan exceeds 75% of the property value


Advance - The amount a lender is willing to lend


Agricultural Covenant - A planning condition which permits the building of a property for residential purposes providing that home is occupied by someone who is going to work the land surrounding it in some way


Appraisal - Usually conducted by an estate agent, an appraisal is determines the market value of your home (see ‘Valuation’ below) not to be confused with a Mortgage Valuation

APR (Annual Percentage Rate) - The rate of interest payable on your mortgage annually


Arrangement Fee - An administrative fee that is sometimes charged by lenders for the arrangement of a mortgage


Assignable Contract - A contract of exchange that permits the sale of a property before the date of completion


AST (Assured Shorthold Tenancy) - A type of tenancy agreement that sets out a landlords and tenants obligations, a contract


Auction- A method of purchasing property where buyers go head to head with others and bid in order to determine the sale price


Base Rate - The benchmark interest rate set by the Bank of England that is commonly used by most lenders to set their own rates


BMV - This stands for Below Market Value and means pretty much what it says, that a property is valued below what it could potentially fetch on the open market


Booking Fee - Same as an arrangement fee (see above)


Bridging Loan - A loan that allows the buyer to purchase a new property prior to the sale of their existing property being sold or used in property investment usually on flip projects


Break Clause - Commonly used in tenancies, often alongside an Assured Shorthold Tenancy (see above). This clause allows either party to exit the contract before the expiration date, providing the correct notice period has been given.

Buildings Insurance - Although its more commonly just said as ‘’ Have you got Buildings?’’

Cover for your property that includes structural issues you may incur during your ownership


Buyer - The person who is purchasing a property


Buy-to-let - Term used for either a property purchased for the purposes of renting (letting) or a mortgage associated with said purchase


Capital and Interest Mortgages - See Repayment Mortgages below


ChainProperties linked together that need to exchange contracts at the same time in order for a sale/purchase to go through. No Chain or Chain Free gives the impression it maybe an easier buying process


Chain Free - A sale or purchase that is not reliant on other parties exchanging contracts at the same time


Collateral - A guarantee of sorts, usually the value of the property, that ensures the lender will have their loan repaid by the sale of the home should you default on your payments


Completion Date - The date that sees the property transaction finalised and ownership is transferred from seller to buyer. Usually when you collect keys


Compulsory Purchase Order (CPO) - a legal order which grants local authorities that need to obtain land or property the power to do so without the owner’s prior consent


Contents Insurance - Insurance cover for the accidental damage or theft of any personal, or moveable, items within the property


Contract - A formal agreement between seller and buyer, usually prepared by a conveyancing solicitor, which details the terms and conditions of the property sale


Conveyancing - The legal process behind the transference of property


Covenant - Tenancy agreement terms that include all of the obligations expected of both the tenant and landlord


Deeds - Legal documentation associated with a property that confirms ownership


Default - Failure to make pre-arranged mortgage payments


Deposit - A financial lump sum paid from buyer to seller, usually held by solicitors, as a pledge of contract


Disbursements - Expenses paid by the conveyancing solicitor on behalf of the buyer


Discounted Tracker Rate Mortgage – A variable rate mortgage that is discounted for a designated period and usually based on the current interest rate set by the Bank of England


Early Repayment Charge (ERC) – A charge incurred by the borrower to the lender should they decide to pay off their loan before the agreed term expires (may also be referred to as an Early Repayment Penalty in some instances)


Easement - This is where a landowner has the right to make use of a piece of land, which is close to theirs, for their own benefit


Energy Performance Certificate (EPC) - A way of measuring the efficiency of a property in terms of energy usage with a scale that runs from A through to G (with A showing the greatest efficiency and G showing the least)


Equity - The difference between the market value of a property and the outstanding loan amount owed on the home


Exchange of Contracts - The time when a sale becomes legally binding and neither party

can pull out without financial penalties


Fixed Price - No offers accepted other than those which match or exceed the asking price

Fixed Rate - A mortgage with a rate that doesn’t change for a designated period of time


Fixtures and Fittings - Any items that are not deemed structural, these can be included in a sale or let


Flying Freehold -This occurs when part of a freehold property overlaps part of a different freehold property or piece of land


Freehold - ownership of the property and the land that the property is situated on


Gas Safety Regulations - Regulations that need to be adhered to by landlords in terms of gas safety. A gas safety check must be carried out by Gas Safe (CORGI) registered engineer prior to a tenancy commencing, and then annually for the duration of the tenancy, and handed to the tenant


Gazumping - This is where a seller accepts one offer only to reject it when a better offer is made by a third party


Gazundering-This happens when a buyer lowers their initial offer just prior to contracts being exchanged


Ground Rent - An annual amount paid by the leaseholder to the freeholder of a property, often with service charges payable as well


Guarantor - A person who agrees to guarantee repayment of a loan or debt for another should they not be able to make payments


HMO- House of Multiple Occupation. As the name suggests, these are properties that house multiple residents. They are also subjected to different rules and regulations than standard rental properties and usually require a license to operate


Home Buyers Report - A document covering the structural condition of readily accessible areas of the property


Instruction - Simply means that conveyancing solicitors or Agents have been instructed or appointed, i.e. you instruct a solicitor to carry out the conveyancing of the property transaction on your behalf


Inventory- A list of all the property’s contents, as well as the property’s condition and the state of the structural fixtures, commonly used in Assured Shorthold Tenancies


Joint Tenancy - Two or more people living in one property


Joint Agency - Two estate agents working together to sell a property


Joint Mortgage - When two or more people are responsible for the mortgage


Land Certificate - Documentation proving property ownership


Land Registry - A governmental body that holds records of all registered properties in both England and Wales


Land Transaction Tax - As of April 2018, buyers purchasing property in Wales are charged a land transaction tax rather than stamp duty


Land and Buildings Transaction Tax - This is the tax payable by property purchasers in Scotland


Leasehold - This is where ownership of a property is obtained but not the land that it is built on. Payment of ground rent to the landlord is also a normal requirement of a leasehold property


LTB (Let to Buy) - The process of letting out a current residential property, for the purpose of purchasing a new residential property


LTV (Loan-to-Value) - The percentage of the loan amount in relation to the market value of the property at the time of purchase


Maintenance Charge - A charge made towards the upkeep of a leasehold property


Mortgage Broker - An advisor who can arrange your loan for you, potentially getting a better deal than you’d find elsewhere


Mortgage Deed - A document that lays out the conditions of a mortgage secured on any given property


Mortgage Offer - A document from a bank or building society offering you a property loan as well its terms and conditions


Negative Equity - When the property’s value is less than the outstanding balance of a mortgage


Offer - An amount (or bid) by a buyer to a seller indicating the price they are willing to pay for a property


Open Market Value (OMV) - A property’s likely value in an open and balanced market


Overpayment - The act of paying more than the minimum amount off of your mortgage each month in order to shorten the length of the term and lessen the amount of interest you’ll need to pay


PCM - Stands for 'Per Calendar Month'. Often associated with rental property prices, i.e. the amount you’d need to pay the landlord every calendar month


Public Liability Insurance - Cover that provides indemnity against injury or death to anybody in or around your property


Repayment Mortgage - A mortgage that pays of both interest and principal by way of regular monthly instalments


Repossession - The unfortunate process of taking back the property in order to sell it and make good on a bad debt should the borrower be unable to pay


Right to Rent - Government legislation that legally binds landlords to check that any potential tenants are living legally in the United Kingdom and, therefore, have the right to rent property here


Right to Buy (RTB) - The right for any tenant who has lived in a council-owned home to buy the house or flat at a discounted rate


Searches - Usually conducted by conveyancing solicitors, these ‘searches’ are simply checks of local council records to see if there are any outstanding planning applications or restrictions in place on the property in question


Shared Ownership - Commonly provided by housing associations, Shared Ownership is a scheme that allows first-time buyers a chance to buy a share of a home (usually between 25% and 75%), and then pay rent on the remaining amount. The percentage owned can be increased by way of ‘staircasing’ until full ownership is made


Snagging - This term is most commonly associated with flip projects for investors and on new build properties and simply means to ‘make good’ on minor faults, such as missed paintwork, appliances not fitted correctly, etc.


Snagging Survey - Usually conducted before the buyer moves in to a new build home so that workmanship can be assessed and issues addressed


Sold Subject to Contract (SSTC) - A term that indicates an agreement to purchase a property has been made but contracts are yet to be exchanged


Stamp Duty - A tax paid by the buyer to the government on completion of a property sale


Survey - A property inspection carried out by a qualified surveyor


Tenants - Those living in a property that is owned by a landlord


Title - A legal right to property ownership


Tracker Mortgage - A mortgage with a rate that moves up or down with the Bank of England’s base rate (see Base Rate)


Transfer Deeds - A Land Registry document that transfers legal ownership from seller to buyer. Usually a fee is charged to hold electronically


Under Offer - When the seller has accepted an offer on their house but contracts have not yet been exchanged


Variable Rate Mortgage - A mortgage with an interest rate that can change at any time


Vendor - Another word for the person selling the property, the seller


Vetting - The process of conducting background checks on potential buyers or sellers prior to purchasing


Offer – the amount a buyer puts forward to pay for a property


Verbal Offer - An offer that is not legally binding made verbally by the purchaser




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©2020 by Alaine Bradbury