Find the language used by estate agents confusing? Don’t worry we’re here to help. From ‘Covenants’ to ‘Gazundering’ this jargon-busting guide makes understanding property as easy as ‘EPC’.
A
Absent Landlord
This is a landlord who isn’t contactable. This causes problems if leaseholders want to extend their lease.
Acceptance
When an offer on a property is accepted. It’s also the name for a legal document you sign when accepting a mortgage offer.
Administration Fee
A charge that covers the costs of processing your application. For tenants this will be added to your initial payment when your tenancy begins.
Annual Percentage Rate (APR)
This is the amount of interest you pay on your mortgage plus arrangement fees and other costs.
Agreement Fee
A fee shared by landlord and tenant to cover the costs of drawing up a tenancy agreement.
ARLA Propertymark
The UK’s leading professional body for letting agents - formerly The Association Of Residential Lettings Agents.
Arrangement Fee
The fee a lender will charge you to arrange a mortgage.
Assign
Word used when a right or interest in a property is transferred to someone new.
Assured Short-hold Tenancy (AST)
A fixed term tenancy with an end date. This kind of a tenancy is for individuals (not corporates) and must be under the value of £25,000 per year.
B
Base Rate
The standard interest rate set by The Bank Of England. A mortgage will either be above or below this rate. The lower the rate, the better value you’re getting.
Break Clause
If a tenancy is a year or longer there’s likely to be a ‘break clause’. This allows the landlord or tenant to terminate the contract earlier than the original fixed term agreed.
Bridging Loan
If you buy a property before selling your existing one, you’ll need a loan to ‘bridge’ the temporary gap in your finances.
Building inspection
A surveyor’s report on the condition of a property. It’s wise to arrange one before you buy a property – although sometimes a simple HomeBuyer Report will do.
C
Capital
The total amount of money you’ve invested in a property including the deposit. It’s less liquid than cash and tied to the property.
Chain
When a buyer needs to sell an existing property to buy a new one the two transactions become linked. It’s common for several sales and purchases to be linked together – this creates a ‘chain’.
Completion
This is when the purchase / sale of a property has been legally completed and money has exchanged hands.
Completion Statement
Receive this after completion, this provides a full breakdown of all costs including estate agent fees and tax paid.
Conditions Of Sale
This sets out the rights of the buyer and the responsibilities of the seller.
Contract
The legal agreement between a buyer and seller. The contract is signed at the point of ‘exchange’ and a completion date is then set in stone.
Contract Race
An rare occurrence where two buyers are competing to buy the same property. Whoever exchanges contracts first gets to buy the property.
Conveyancing
The legal process of buying / selling a property. Your solicitor is known as your ‘conveyancer’.
Covenants
Restrictions on a property’s use mentioned in its title deeds or lease.
Credit Search References
Part of a vetting process to check that tenants can pay their rent. A tenant’s credit history will be looked at and their employer might be contacted too.
D
Deeds
A legal document that confirms who owns a property.
Deposit
Money put down to secure a purchase or rental agreement - normally 10% of the agreed purchase price or six weeks’ rent.
Dilapidations
Damage done to a property and it’s contents during a tenancy. Tenants may have to compensate the landlord for this.
Disbursements
Non-legal extra costs in the conveyancing process e.g. stamp duty, land registry fees, mortgage redemption costs, and search fees.
Draft Contract
An initial contract that is sent before exchange.
E
Easements
The rights third parties might have in regard to a property e.g. TV or telephone cables running underneath a house or garden.
Enquiries
Questions asked by a buyer’s solicitor during conveyancing.
EPC
This stands for ‘Energy Performance Certificate’. It shows a property’s energy efficiency and carbon emissions.
Equity
The difference between your home’s value and the mortgage still owed.
Exchange of Contracts
A big step in buying or selling a property. Once contracts are exchanged the contract terms are binding and neither party can pull out with penalty.
F
Fixtures and Fittings
Items that are fixed to a property but not part of a sale unless specifically mentioned e.g. light fittings, attached mirrors, satellite dishes, carpets, and curtains.
Freehold
When you buy a ‘freehold’ property you own it indefinitely. This is different from ‘leasehold’ properties that are owned for a set period of time.
G
Gas safety record
Issued by a CORGI registered engineer, this certificate proves that a rental property’s gas appliance, flues, and pipework are safe. Landlords must arrange a gas safety check every year by law.
Gazumping
A buyer’s big fear. If you have an offer on a property accepted, start the conveyancing process, but then the seller accepts a higher offer from another party before exchange then you’ve been ‘gazumped’.
Gazundering
A seller’s big fear. This is when a buyer suddenly reduces their offer immediately before exchange.
Ground Rent
An annual fee paid by a leaseholder to the freeholder.
H
HomeBuyer Report
A document that outlines the condition of a property prior to exchange. HomeBuyer reports are not as detailed as full structural surveys but they still list defects and outline how serious these are.
I
Inventory
An inventory lists the contents of a rental property and records their condition. Dilapidation reports refer back to the inventory at the end of a tenancy.
L
Land Registry
When a property changes hands a record is made at the Land Registry. This government office holds information about every property in the country including ownership, related charges and mortgages.
Land Registry Fee
A fee paid by the buyer when the Land Registry updates its records after a purchase.
Lease
The period of time a tenant is legally allowed to occupy a property. At the end of the lease the property is handed back to the owner.
Leasehold
Unlike freehold properties a ‘leasehold’ property is only sold to a buyer for the duration of a lease – normally 99, 125, or 999 years. Many flats are leasehold.
Listed Building
A listed building is a protected property with special architectural or historical significance. It is illegal to demolish listed buildings and major alterations are usually restricted.
Local Authority Search
One of the first steps in the conveyancing process. This is when a solicitor formally asks the local council if there are any matters affecting the property that the purchaser should know.
M
Maintenance Charge / Service Charge
A fee paid by a leaseholder to a freeholder to cover costs like maintenance and insurance.
Maisonette
A one-level or split-level property with its own private entrance. Flats are different because they usually have a communal entrance to the building.
Mortgage Valuation
When a lender commissions a surveyor to value a property to ensure that the purchase price is fair.
Multiple Agent Instructions
The opposite of sole agent instructions. This is when a seller appoints multiple agents to sell or lease a property. They do this to create competition between agents in the hope of securing a faster sale or higher price.
N
NAEA Propertymark
The new name for the National Association of Estate Agents, our industry’s leading professional body.
Negative Equity
This occurs when a property goes down in value and the amount outstanding on a mortgage is more than the house is now worth.
O
Open House
An alternative to private viewings, an open house is when several potential buyers can view a house at the same time.
Open Market Value
The estimated value of a property if marketed correctly and given the usual time to sell.
P
Peppercorn Rent
A nickname for very low ground rent.
Preliminary Enquiries
The first set of questions a buyer’s solicitor will ask the seller’s solicitor during conveyancing.
Property Auctions
An event where rival buyers bid for a particular property either online or at a physical address.
Property Ombudsman
An independent official who will resolve disputes between buyers / sellers and the estate agent.
Purchaser
Another name for ‘buyer’.
R
Repossession
When a lender takes possession of a property because the buyer cannot make the mortgage repayments.
S
Searches
When a buyer’s solicitor checks local records to see if there is anything that might affect the property’s value. See also Local Authority Search.
Share Of Freehold
Sometimes the freehold of a building will be held by a limited company if it contains multiple flats. Shares in this company are then allocated to the individual flat owners.
Sole Agent
When a single agent is instructed to sell or let a property.
Sole Selling Rights
An estate agent with sole selling rights will collect a pre-agreed fee when the property is sold. This occurs even if someone else ultimately finds the buyer.
Stamp Duty Land Tax (SDLT)
A tax on property purchases. The amount owed depends on the purchase price, with properties in higher price brackets paying more. First time buyers are exempt on purchases less than £300,000.
Sold Subject To Contact
This is when a purchase price has been agreed but contracts haven’t been exchanged yet.
Survey
When a qualified surveyor assesses the condition of a property, identifies any faults, and prepares a report. See also Building Inspection and HomeBuyer report.
T
Tenancy
When a tenant signs a lease and then occupies a property.
Tenancy Agreement
The legal terms which apply to a tenant’s occupation of a property.
Tenancy Deposit Scheme (TDS)
An insurance scheme that protects tenants’ deposits and helps to resolve disputes between landlords, agents, and tenants. Agents and landlords must follow the TDS Code Of Recommended Practice.
Tenant
A person who occupies a property for a set period of time determined by a lease or tenancy agreement.
Tenure
The terms under which a property is owned or occupied. There are three types of tenure: freehold, share of freehold, or leasehold.
Title Deeds
An official document confirming the legal owner of a property.
Transfer Document
This confirms when ownership of a property has been legally transferred from seller to buyer.
U
Under Offer
A term used to indicate that a seller has accepted an offer on a property and conveyancing has begun.
V
Valuation / Market Appraisal
The estate agent’s informed opinion of what a particular property is worth in current market conditions.
Vendor
Another word for ‘seller’.
