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Glossary

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Stuck over a property definition? Use our property dictionary of terms below to help you understand what is in property contracts, property details, letters about property projects.  

AMV (Advised Minimum Value) : A term used for the lowest acceptable price in Ireland.

APR (Annual Percentage Rate) :  The true rate of interest you are paying on a financial agreement.

Asking Price : The price set by the seller before any negotiation.

Assignable Contract : One which allows the holder to convey his rights to a third party.

Base Rate : The rate of interest used by UK clearing banks as a basis for calculating their lending rates.

BBR : Bank of England Base Rate (see above)

Bridging Loan : A sum of money borrowed to allow you to buy a property before finalising the sale of other property.

Brownfield :  Land which has previously been developed.

BTL (Buy to Let) : To buy a property with the intention of letting it on a commercial basis.

Building Regulations : Rules of a legal or statutory nature by which local councils control the style and quality of buildings.

Buildings Insurance : A policy which pays the cost of rebuilding or repairing a structure if it is damaged or destroyed.

Buying off-plan : To buy a property before the actual building work is finished.

Building Warranty: Guarantee provided to cover any defects in a new property.

Capital : Money available to initiate or operate a business

Capital Gains Tax: a tax on profits made from investments, payable only when the investment is sold or otherwise disposed of.

Chain : The series of people linked by related property sales and purchases.

City and Guilds A training organisation awarding vocational qualifications.

Commission : A fee payable for services rendered, for example to an Independent Financial Adviser or estate agent.

Commonhold : A system of property ownership in England and Wales, introduced in 2004.

Completion : The moment when the legal title on a property passes to a new owner.

Conditions of Sale : The detailed standard terms governing the rights and duties of the buyer and seller of a property and set out in a contract.

Contingency : An amount of money over and above the budget to cover the cost of any unexpected work.

Contract : The agreement to buy or sell a property.

Covenant : An agreement in a deed to do (or not do) certain things.

Conveyancing : The legal and administrative process of transferring ownership of land and/or property.

Deeds : Documents confirming ownership of a property, also known as Title Deeds.

Deposit : A partial payment made when contracts are exchanged.

Disbursements : Miscellaneous fees incurred during the conveyancing process.

e-conveyancing : Undertaking the process of conveyancing through the web and e-mail as well as by phone.

Endowment mortgage : An interest-only mortgage where the capital should be covered by a savings plan.

Equity : The difference between a loan on a property and the price at which it is sold.

Exchange of contracts : The moment when, in England and Wales, a contract for the sale or purchase of a property becomes legally binding.

Final sale price : The amount at which a property is sold, finalised when contracts are exchanged.

Fixtures and fittings : Non-structural items in a property which are permanently fixed, such as door handles, bathroom suites, radiators etc.

Flipping : Buying and selling within a short period of time to take profits.

Freehold : Ownership of both a property and the land which it stands on.

FSA : The Financial Services Authority.

FTSE : (pronounced “footsie”) Financial Times Stock Exchange, an index based on the value of leading companies traded on the London Stock Exchange.

Full planning permission Approval from your local authority for you to go ahead with the property improvements as indicated in the plans you have submitted to them.

Gazumping : When a higher offer is accepted on a property after a lower offer has already been accepted but has not yet become legally binding (i.e. before exchange of contracts).

Gazundering : When a purchaser reduces an offer at a late stage in the buying process, such as on the day of exchange.

Gearing : The ratio of your own money to borrowed funds for an investment.

GFCH : Gas fired central heating

Ground Rent : Annual rent paid on a leasehold property.  A very low amount is known as a “peppercorn rent”.

Guide Price : An indication of the price a property is expected to sell for, and in Scotland usually the minimum price for which a property may be purchased.

Hectare : A metric unit of measure equivalent to 2.471 acres.

Higher Lending Charge :  A premium charged to borrowers to indemnify Lenders against any financial shortfall.

HCR : Home Condition Report – the survey element of a HIP, not yet mandatory.

HIP (Home Information Pack) : Since December 2007 this has to be put together before a property can be marketed in England and Wales.  

IFA : Independent Financial Adviser

Indemnity policy : Insurance for property owners which gives protection in disputes.

Instruction : Telling an agent you want them to market your property.

Interest-only mortgage : A loan where only the interest is payable during the term of the mortgage, with the capital due for repayment at the end.

Intermediary : Someone who brings buyers and lenders together and assists in negotiating terms.

Inventory : Listing of the contents of a property including their state or condition, which may include the garden, fixtures and fittings etc.

Joint agency : Where two selling agents are marketing the same property at the same time.

Joint tenancy : Where two or more people own a property equally.  On the death of any one owner the property passes to the survivor(s). 

Land certificate : Evidence of ownership of land, issued by the Land Registry.

Leasehold : The right to possession and use of land for a fixed period of time,  usually connected with flats and other shared buildings.

Licensed Conveyancer : A specialist in the transfer of property ownership, may be used instead of a solicitor.

Lintel : A horizontal beam above a window or door opening which supports the structure above.

Load-bearing wall : A wall that supports structural weight above it and cannot be removed without replacing that support.

Local searches : Information obtained from local authorities on planning and environmental matters.

Mezzanine Finance An intermediate range of funding or investment that has a moderate degree of risk, such as some unsecured, high-yielding loans

Mortgage : A legal contract which pledges a property as security for a loan.

Mortgage Agreement in Principle (MAP) : a preliminary agreement to provide a loan, prior to a specific application, to a particular person or people.

Mortgage protection policy : Insurance to pay off a mortgage should a borrower die, become sick or suffer any other undesirable event, depending on the policy cover. Mortgage redemption penalty : A charge which may be made by a lender if the mortgage is paid off within a specified time, typically 2-5 years from inception. 

Mortgage roll number or reference : The number provided by your lender which identifies your mortgage.

Multiple agency : When more than two agencies are appointed to sell the same property at the same time.

Negative equity : When a borrower owes more on a property than the property is worth.

NVQ (National Vocational Qualification) : A work-related award that is given based on skills, knowledge and competence from studying and on-the-job training. There are various levels that can be attained.

Office Copy : The official copy of an entry from the Land Registry.

Outline planning permission An approval “in principle” from the local authority, given subject to gaining full planning permission.

Part Exchange : An arrangement where your home is bought by a developer or agent so you are free to purchase another house which they are selling.

Party Wall : A wall built on a line between two adjoining properties and common to both owners.

PIC : Property Investment Club

PIP (Purchaser’s Information Pack) : Mandatory in Scotland from 2008

Planning officer : A local authority employee who advises on changes to your property and how they might impact on nearby buildings, people and the environment.

Portfolio : A collection of financial assets owned by an individual or institutional investor.

PPI : Payment protection insurance.

Profit – The excess of income over expenditure.

Redemption : Complete repayment of a mortgage loan

Repayment mortgage : Loan where both capital and interest are paid off on a monthly basis for a specified number of years.

Restrictive covenant : Legal restriction on a property or land and the use that it can be put to. 

Retention : Money held back from a loan until structural faults are corrected.

RSJ : Reinforced steel joist, added to a wall for strength.

Sales particulars : Information prepared in order to market a property.

Sealed bid :  Making an offer in a sealed envelope by a set date and time.

Searches : See local searches.

Shared ownership : Where someone owns part of a property (usually on a mortgage) and the rest is owned by and rented from a housing association.

Snagging : Checking a new home for minor faults.

Sole agency : Where one agent has the exclusive rights to sell a property.

Stamp duty land tax : Commonly referred to as “Stamp Duty” it is a tax levied by the Government on land transfer and paid by the buyer.

Subject to contract : The period during which a sale is agreed but there is not yet a binding legal contract.

Sub-letting : When the tenant rents out a property to a third party.

Subject to survey : Where an offer is dependent on an acceptable survey report. 

Sum insured : The declared value of a building, contents or any object and the amount on which any insurance claim will be based. 

Surrender value : The amount payable to a policyholder who officially ends an insurance policy before its maturity date.

Survey : Report on the condition of a property.

SVQ : The Scottish equivalent to an NVQ

Tenants in common : A property ownership arrangement where two or more people own property jointly.  Their shares may not be equal.

Term assurance : Life insurance set up over a specified period, for example to cover the term of a mortgage.

Tied agent : An individual or business selling only one company’s products.

Title deeds : Documents showing proof of ownership and the extent of a property.

Top-up mortgage : An additional loan where the first mortgage is not sufficient for your needs.

Under offer : Where the seller has provisionally accepted the prospective buyer’s offer on a property.

Unit Trust : Investment in a fixed, diversified group of professionally-selected stocks or bonds.

Vacant Possession : Term indicating that the property will be unoccupied when the buyer is ready to take up residence.

Valuation : A professional opinion of the value of a property.

Variable rate : Interest rate that changes periodically in relation to a specific index, such as the Bank of England base rate.

VAT (Value Added Tax) Paid on the increased value of a product or service and added at each stage of its production.

Vendor : The seller of a property.

Void : A period when a property is untenanted and producing no rental income.

Yield : To gain an amount as a return on an investment.

 

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