Agency sales fee
A fixed amount of either your property price if selling or rental value if letting is paid to the estate agent upon completion of job.
Auction
The bidding of several interest parties on one property. The sale then goes to the highest bidder.
Annual percentage rate
APR – This is the total cost of the loan, also includes all costs such as the interest charges and arrangement fees. They are then presented as a percentage % therefore can be easily compared against mortgage interest rates.
Agreement in principle
AIP - Provided by a mortgage lender. Your AIP confirms to the seller and estate agent that you can actually obtain a mortgage to cover the purchase price.
Architects certificate
This is the alternative offered to builders/developers when there is no NHBC (National House Building Council) guarantee for a new home
Appraisal
This is an approx estimation of the value of a property by President Properties. Most homeowners will check for comparable on big portals such as right move, find property, prime location in order to ensure they are within the same price as those similar.
Bank of England base rate
The current rate of interest set by the Bank of England which all lenders usually follow.
Banker’s draft
Guaranteed by your bank, a bankers draft is seen as more secure than a personal cheque.
Bridging Loan
This is similar to a short-term loan. This enables a purchaser to complete on the purchase of a new property before selling the previous property.
Building Survey (formerly full structural survey)
Carried out by a chartered surveyor, a building survey is appropriate for any property particularly older ones, or those which have been poorly maintained. Upon completion of the survey the surveyor will write up a detailed account.
Buy to let mortgage
A mortgage exclusively designed for people buying a property with the purpose of letting it out. Buy to let mortgages in general require a higher deposit be put down.
Capped mortgage
Agreed for a fixed period of time, lenders usually provide mortgages with an upper limit on the interest rate. Thus if the standard interest rate is lower than the upper limit you will be charged the lower rate, but if the standard variable rate is higher you will be charged at the agreed rate.
Catchment area
This is the area neighbouring a school (i.e. a postcode). You must live within this area for your children to be entitled to attend.
CCJ
This stands for County Court Judgement. These are issued by the Magistrates court against an individual who failed to pay for something. They must then subsequently pay the outstanding debt. The CCJ will then be brought up in future if applying for credit.
Completion
The point at which all transactions concerning the property’s sale are concluded and legal transfer of ownership passes to the buyer.
Contract
This is the legal agreement between the seller and a buyer of a property, which binds both parties to complete the transaction.
Contract race
In some cases when two purchasers have offered on a property the vendor (seller) can choose to sell to the first one to exchange contracts.
Conveyancing
Term for the legal work involved in the purchase and sale of a property.
Covenants
Rules and regulations governing the property, contained in its title deeds or lease. Some properties may have a covenant placed on them by a previous owner, restricting future building works etc by any future owner.
Damp proof course
A layer of resistant material (such as mineral felt PVC etc.) integrated into a wall to avoid dampness rising up the wall or lateral dampness around windows doors.
Deeds
These are Legal title papers, proving possession. The deeds are held by the mortgage lender, however if no mortgage is held on the property then it is held by the property owner.
Deposit
A sum of money (usually a minimum of 5%) paid by the buyer on exchange of contracts.
Dilapidations
These are any poor condition or damage to a rented property.
Disbursements
This is the term for all Fees paid by the buyer's solicitor on the buyer´s behalf such as stamp duty, land registry and search fees.
Discharge
This is used as a term describing paying off a mortgage.
Draft Contract
This is the initial, unofficial version of the contract.
Early redemption charge (ERC)
This is also known as an early redemption penalty. If the borrower terminates a mortgage in advance of the terms of the particular mortgage then a charge is made by a lender. In general this occurs when the borrower has benefited from reduced payments or cash back in the early on stage of a mortgage.
Easement
The legal term for the permission to use someone else's property for example a joint driveway or a path.
Exchange of contracts
This is the stage when contracts are signed and exchanged. At this stage both the purchaser and seller are legally committed to carry through with the sale, purchase of the property at the agreed price. The completion will then take place at the agreed time after
Failed valuation survey
This occurs when the surveyor points out that the property is not worth the agreed asking price and the lender then as a result turns down the mortgage application.
Fixed rate mortgage
A set period of time the interest rate is set on the mortgage.
Fixtures & fittings
Any items included in the purchase of a property. These can be anything from furniture to kitchen appliances.
Flying freehold
This is referred to when a section of a freehold property is positioned over (like a bridge) of a different freehold property or land.
Freehold
When the owner, owns both the building and the land that is it built on.
Freeholder
The individual who owns the freehold – see above.
Gazumping
Gazumping is when the seller has accepted an offer from a buyer, however at a later stage in the sale then accepts a higher offer from someone else. When the property market is prosperous this is not uncommon, however not looked favourable upon by anyone.
Gazundering
Again this is not looked upon favourable by anyone. This occurs when the purchasers forces through the threat of pulling out for the seller to reduce the agreed price even further just as the exchange of contracts is about to take place.
Ground rent
This is a charge placed annually on all leasehold properties by the freeholder.
Guarantor
This is a person who is appointed to ‘promise’ to pay the, mortgage debt if the borrower cannot pay for some reason. In some cases the lender requires this.
Homebuyer's survey and valuation (house/flat buyer's report)
This is the most commonly used of all surveys. This is not as detailed as the structural survey. It gives an account of the value of the property and condition.
Housing association
They provide low rent property. There are also a number of schemes, which include buying art of the property you rent and renting the other part (shared ownership). The Housing Association is a non-profit making body.
IFA
Independent Financial Advisor who can offer mortgage advice independently. Free of ties to any particular lender. You therefore gain advice on a wide variety of lenders on the market.
Inventory
This is a check list done the condition of a let property. An inventory is carried out prior to the tenants moving in and once they have moved out to ensure any damages are accounted for in the deposit monies before they are returned to the tenant.
Joint Agency
This is the term used when there are two estate agents instructed to sell your property. The fee, which you pay to agents, is higher when in a joint agency situation.
Joint Tenancy
This is the case when two people purchase a property together. Both parties have an equal share in the equity, therefore if something happens to one party i.e. death the other person has sole ownership.
Land registry fee
This is the monies paid to the Land Registry to legally register the ownership of the property.
Leasehold
This is when the purchaser is in ownership of the property but not the land that it is built on.
Listed building
This is a building which cannot be altered in any way without the permission of local government consent. Usually they are of architectural or historical interest.
Local Authority Search
This is the enquiries made by the purchasers solicitor to the council (local) regarding any future changes to the in the area which might have an effect on the property.
Maintenance Charge (or service charge)
This is an annual charge applicable to the majority of leasehold properties. Monies are then used towards repairs and maintenance of all communal parts of a building.
Mortgage Term
This is the length of time in which the loan borrowed in to be repaid.
Mortgagee
The body lending the mortgage (i.e.: bank or building society).
Multiple agency
This is when the seller instructs several Estate Agents to sell the property at the same time. The fee to be paid to the estate agent is usually more than sole agent or even joint agency.
National House Building Association
They are the governing body of all new homes, which are sold with a 10 year guarantee. They ensure that the property is built properly and safely.
Negative equity
This is when the value of the property falls below the value of the outstanding mortgage.
NHBC scheme (National House-Building Council)
Many developers offer this as a guarantee on newly built homes.
Notice
This is a legally correct way of the freeholder or landlord requesting vacation of the property. This can occur for a number of reasons however there will be sufficient time allocated in order to enable you to find alternative accommodation.
Off-plan
This is the term applied when purchasing a property before it has been built.
Ombudsman
An Independent specialized bodies that inspect complaints on behalf of customers against, for example, Estate Agents, Solicitors and Insurance Companies.
Part Exchange
This is most often the case when a developer offers to buy your property and puts the monies towards the cost of your new home. Although it is very convenient as it eliminates the potential of a chain, the downside is that the developer in many cases will offer you less than the open market value for the property. This is so that they can make a profit on re-sale.
Preliminary enquiries
These are the original enquiries presented to the vendor/seller which must be answered in order to exchange the contracts.
Property Chain
This is the term used when the buyer is dependent on the completion of the sale of their property in order to purchase the proposed property.
Redemption
This is when a mortgage is fully repaid.
Re-mortgage
This is the terminology is used either for a change to the lender, which provided the mortgage on your property or taking a second mortgage out on the property, in order to release the equity gained by the rise in the value.
Repayment Mortgage
A monthly mortgage repayment of capital united with interest.
Repossession
When the mortgage repayments on a property are not paid the lender is entitled to ‘repossess’.
Retention
If there are specific works that needed on the property the lender is entitled to hold back a percentage of the mortgage loan until is nit carried out.
Right of way
When there is the ‘right’ to use property also belonging to someone else. Most commonly found when there is for example a shared driveway.
Sitting tenant
This is when the person involved has a legal right of occupation. This is regardless of situations such as the property is sold to someone else. They can apply to the local authority to set a reasonable rent.
Sold subject to contract
This refers to the agreement to sell or buy a property subject to the exchange of contracts.
Sole agent
This is when the seller instructs only one agent to sell their property. The fees to the agent are usually at the lowest of sole agent.
Solicitor
A Legal, professional dealing with all documents for the sale or purchase of a property.
Stamp Duty
The Government imposed this tax when buying a home. The rate currently pans out as:
House value % to be paid
£125,000 - £250,000 1%
£250,000 - £500, 000 3%
£500,000 + 5%
Subject to Contract
Therefore the contract in place is not legally binding.
Tenancy
This is a time period in which the tenant is in possession of the property.
Tenancy agreement
This is the legal biding contract between the landlord and the tenant. All the terms and conditions will be outlined within this contract.
Tenure
The term used for the length of the lease.
Title deeds
The legal documents confirming ownership of a property.
Transfer deeds
This is the legal contract which documents the transfer of ownership form the seller to the buyer.
Under offer
This is the label given to a property when the seller has accepted an offer; however there has not been exchange of contracts taken place yet.
Valuation
This is the approximate value of a property given by the estate agent.
Vendor
This is the name given to the seller of a property.
Yield
The income gained form a property usually calculated as a % of the value of the property.