Property Glossary ( UK )

AcceptanceWhen you are offered and accept a mortgage offer from a lender this is what you need to sign and return.APRStands for ‘Annual Percentage Rate’ relating to interest on a loanApplicantThe term used by an estate agent to refer to you when you are a potential buyer of a property.AppraisalWhen selling your house an estate agent will ‘appraise’ your property to determine a current value for it.Arrangement FeeSome lenders may ask for this fee for providing or ‘arranging’ a loanAssignmentThe transfer of ownership from one person to another. For example if you buy a leasehold property ownership is ‘assigned’ to you via the contract.Base RateThis is the lowest rate of interest a bank will charge when it lends you money and is used as a benchmark to set interest rates for borrowers. This rate set by the Bank of England and is reviewed several times a year. Lenders will charge borrowers a margin above the base rate.Bridging Finance/LoanYou may need ‘Bridging Finance’ if you are buying a new property before selling your current house. This is to ‘bridge’ the gap before you have sold your property so as to complete the buying process of your new property before selling your existing home.BrokerThis is a person who advises on mortgages and loans, known as a ‘mortgage broker’Capped RateThe maximum set interest rate you will pay on a mortgage for a set period of time. This means that the interest rate cannot go higher than the capped rate during the specified time period, usually the first few years of the loan.ChainThis refers to a sequence of buyers and sellers. Most people who sell their homes are also buying at the same time. There can be a ‘chain’ of several buyers and sellers, each dependent on each other for the sale and purchase of their new homes. If one buyer or seller drops out the whole chain may collapse, leading to a domino effect where the paperwork for several properties is delayed or cancelled altogether.Chain FreeThis is when the owner of property doesn’t need to sell the property in order to buy another, thus it is offered chain free.CollateralYour house is ‘Collateral’ when used as a guarantee you will repay a loan to your lender. If you do not keep up with repayment your house could be sold by the lender to get back the money they have loaned you.CompletionThis is the final stage of the property buying process – when the agreed sale price has been paid by the buyer to the seller. Legal ownership has been transferred from the seller to the buyer of the property.Contents InsuranceThis insurance is taken out to cover/protect personal belongings that are in your home.ContractThis is the agreement that once signed by the buyer and seller binds both parties to the sale and purchase of the property.ConversionThis can refer to a property that has had the loft converted into a room, or a house that has been converted into flats.ConveyancingThe name of the legal process that transfers property ownership from the seller to the buyer.CovenantA requirement by law on the owner of a property to either do or not do something with their property.CAMStands for Current Account MortgageCCJThis stands for County Court Judgement. If you have a judgement against you for defaulting on a debt it may mean you are turned down for future loans or pay a higher interest rate.DeedsThe legal documents regarding a property.DefaultThis is a term used when you do not do as you agreed, eg. failing to make a mortgage payment. If you fail to make mortgage payments (or default), your home could be repossessed.Delayed CompletionTypically completion takes less than 28 days after the exchange of contracts. If it takes place after 28 days then it is called ‘delayed completion’DepositIn terms of mortgages a deposit is the initial lump sum payment the buyer contributes towards the total purchase price of the property.DisbursementsThis is another word for the legal costs involved with purchasing a property.Discounted RateThis type of mortgage has an interest rate lower than the lender’s Standard Variable Rate (SVR).Early Repayment ChargeThis is a charge or ‘fee’ payable if you pay part or all of your mortgage off earlier than agreed. This is used to compensate the lender for interest that would have been paid if the mortgage had run for the full time period agreed.Equitable InterestWhen a person has some legal rights to a property but not including sale of the property.EquityThis is what you actually own – it is the difference between the market value of your property and the amount of the loan you still owe to the lender.Exchange of ContractsThis is the point at which the buyer and seller are legally bound to complete the sale.Execution OnlyA service with no advice, just carry out the orders of a customer.Fixed Rate MortgageA mortgage which has a ‘fixed’ rate of interest for a set period of time.Fixtures and FittingsThese are items in a house that are included in the sale. For example lighting fixtures, carpets and so on – these should be agreed / confirmed before a sale.Flexible MortgageAs the name suggests this mortgage is flexible in terms of how you pay the loan back. An example could be that it allows you to make overpayments or pay off your mortgage early.FreeholdComplete ownership of a piece of land and the property that is on it.GazumpingThis is when a vendor (seller) accepts an offer but later rejects it to accept a higher offer by another buyer.GazunderingThis is the opposite of gazumping – when the buyer threatens to pull out just before the exchange of contracts if the price is not reduced.GearingUsing loaned funds to progress investments. For example, buying a house with a small deposit and the rest with a mortgage and then selling the property on at a higher price, making a profit.Ground RentThis is rent paid annually by the leaseholder of a property to the owner of the freehold. Usually it is paid to the owners of the land on which the property/properties are built.GuarantorA person who agrees to guarantee that they will pay a debt or loan if you default on payment.Home Information Pack ( HIP )Also known as a ‘Sellers Pack’ this will be a mandatory Survey from the 1st of June 2007 to be produced by a home owner or selling agents via a home inspector before a property can be put on the open market. The aim is to help improve the process of buying and selling a home, it is part of the conveyancing process and will include detailed information about a property.IFAIndependent Financial AdviserInstructionThis is when you give an estate agent ‘Instructions’ or the right to sell or let your property.Joint / Multiple AgencyThis is when you instruct more than one estate agent to market your property.Land CertificateThe certificate that proves ownership of land issued by the land registry.Land RegistryA government office that stores records of land ownership and any charges like a mortgage.LeaseA legal document detailing an agreement made between a freeholder and those occupying their property for a specified period of time. It lists all the conditions which the leaseholder must abide by and what the landlord’s responsibilities are.LeaseholdLand or property is ‘leasehold’ when the owner has to pay the freeholder an annual sum of money.LenderA person or company that lends money for an agreed time period. They expect to have the money repaid back with interest added – your mortgage company is a lender.LTVLoan To ValueMaintenance ChargeA landlord charges for the annual maintenance of a property which should be agreed in your contract. This includes keeping the outside of the property in good order and gardening services in communal areas.MIGMortgage Indemnity Guarantee – an insurance premium some lenders may need you to take out on certain mortgages.B>MortgageMoney borrowed from a lender to buy a property. The borrower agrees to use his or her property as security against it until the loan is paid back.Mortgage DeedA document which has the details of a mortgage arrangement.Mortgage OfferAn offer from a lender which details the terms and conditions of a loan.MortgagorThe individual who is borrowing money for the purpose of buying a property.Negative EquityWhen you owe more than the market value of your property, or have paid or are paying back more than a property is worth.OfferAn offer, usually below the asking price, you make on a property.OMVOpen Market Value – the value a property can achieve when there is a willing buyer and seller.RedemptionThis is the moment when you pay off your mortgageRegistered LandLand including any property on it that is registered with the land registry.Right Of WayThe legal access to a piece of property so as to access your own property.ROIReturn On Investment – how much you get out of what you put in.SearchesThe process of finding out if there are any unwanted effects now or planned for the future on a property.Sole AgencyWhen a single (sole) estate agent has been given the right to sell or let a property.Stamp DutyTax paid to the government on the purchase price of property.Subject To ContractThe point at which both parties are free to pull out of an agreement before exchange of contracts.SurveyA survey is the report produced by a building surveyor for the purpose of determining the value of the property and if it is structurally sound.TenantA person or persons (can be a company or organisation) who is entitled to occupy a property under the terms and conditions of a tenancy agreement.TenureThe type of ownership of a property such as Freehold or LeaseholdTitleThe legal right to ownership of a property.Title DeedsA Document that shows ownership of a property.Under OfferWhen a property has had an offer accepted but contracts have not been exchanged.ValuationA service by an estate agent or independent expert to determine the value of a property in the current market.VendorThe person who is selling a property.This is meant as a general guide and should not be seen as legal advice.

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