Estate Agent Jargon

A type of mortgage specifically designed for people who want to invest in the property market by purchasing one or more properties and letting them out to tenants.

The amount of the loan which interest is calculated.

Are supposed to offer the best of both variable and fixed rate deals. You agree to have a limit - a cap - on the maximum amount of interest you will pay over a particular period of time while allowing it to fall if the variable rate drops.

The parties involved in a linked transaction of more than one sale/purchase. A delay in one link in a chain can hold up all other related transactions.

The date when the transaction relating to the sale/purchase of a property is completed. This is usually the date you become the owner and can move in.

A financial statement from the solicitor detailing all financial transactions in relation to the sale/purchase including costs and disbursements.

The terms by which the buyer and seller agree to sell/buy the property. The Law Society sets standard conditions. The conveyance lawyer may set special conditions in each case.

Covers your personal possessions within the property.

The legally binding agreement specifying the detail of the sale or purchase. The seller's conveyance lawyer draws up two copies of the same contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are “exchanged” at which point the sale becomes binding on both parties.

The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house.
This can be a solicitor or a licensed conveyancer.

The legally binding document that transfers the rights and burdens and the benefit of the land.

Are restrictions that are imposed on the use of land or property by a former owner. If land or property is subject to any covenants, these will be shown within the deeds of the property. The existence of any covenants should be brought to the attention of a purchaser by their Solicitor when the land / property is sold.

The legal title document which provides historical information about the property, possibly including details of any restrictive covenants, etc..

The amount on exchange of contracts, which is only refundable in exceptional circumstances. Contracts usually provide for 10% of the purchase/sales price but this can often be negotiated to a lower level. The deposit forms part of the purchase price and should not be confused with the “deposit” towards a mortgage, which is the “cash” difference between the purchase price and the amount of mortgage.

The various costs the solicitor/licensed conveyancer will pass on to you in addition to their professional fees. E.g. land registry charges, search fees, photocopying etc.

Preliminary and unconfirmed version of the contract which is shared between solicitors to finalise.

This will show whether or not the surface and/or foul water drains run into a public or private sewer.

A charge made by the mortgage lender if the borrower terminates a mortgage in advance of the terms of that particular mortgage. ERCs are generally imposed on fixed or discounted mortgages offering a relatively cheap deal for an initial period. They usually run only until the end of the initial cheap deal period, though some mortgages impose extended redemption penalties which continue even though the borrower has moved back onto the lenders standard variable rate.

A right given to the owner of a property over an adjoining property (e.g. right of way).

It has more recently been recommended that the buyer’s solicitor should also carry out an environmental search to see if there are any landfill or waste disposal sites in the area, if the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.

The proportion of the value of the property you actually own, as opposed to the amount mortgaged.

A fixed sum paid to the insurance company at the commence of any claim

The point that both parties are legally committed to the transaction. The time and date of exchange is recorded by the conveyancing lawyers of each party.

A type of mortgage where interest repayments to the lender are fixed until maturity or for a specified term.

A list of the items at the property, which are either included or excluded from the agreed price.

Recognised by English law, freehold is the complete and indefinite ownership of a piece of land and any buildings on it. There can still be restrictions on the use of the land.

The Financial Services Authority is an independent government body concerned with consumer protection in the financial market.

When the seller accepts a higher offer from another buyer after an initial offer has been accepted.

When the buyer lowers their offer after the sale has been agreed.

An annual charge paid by the leaseholder to the freeholder.

Someone who agrees to stand surety for your mortgage and will be liable to pay it off should you default.

A survey done to a standard format set out by RICS.It is most suitable for conventional properties built within the last 150 years, which are in reasonable condition. It doesn't detail every aspect of the property, and only focuses on urgent matters needing attention. It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations.

Homes of Multiple Occupancy.

Independent Financial Advisor.

An interest only mortgage that works on the same principle as endowments: you invest in a fund which is expected to build up enough cash to repay the mortgage at the end of the term, usually 25 years.

An insurance taken out by conveyance firms to cover losses to clients arising from errors or fraud in dealing with their matters.

In an interest-only mortgage your repayments only cover the interest on the mortgage amount and do not repay any of the underlying loan capital. While there may be good reasons for operating a mortgage in this way, it is imperative that provision is put aside to pay off the loan at the end of the term. Using an investment vehicle to build up a capital sum may be one way of doing this e.g. through an ISA plan, but with all investments there is an associated risk that the sum provided on maturity may not meet the liability. It is important to get advice in this area to ensure that an interest-only mortgage is right for your circumstances.

A list which describes in detail the condition of furnishing and contents of a property to be let out. This is done before the tenancy commences in order that any dilapidation during the tenancy can be identified.

Two or more people owning property. In the event of the death of one of the tenants, the property passes to the survivor(s). (regardless of the terms of the deceased owner’s will)

If you are obtaining a mortgage the lender will ask your solicitor to carry out a search to make sure that are you are not bankrupt!

The official body responsible for recording the ownership of land.

Fees paid by your conveyance lawyer on the buyer’s behalf to register the ownership of property with the Land Registry.

This is carried out just before completion in order to find out if there are any new mortgages registered against the property that have not previously been disclosed. If there are then the buyer’s conveyance solicitor will require confirmation that these will be repaid.

A contract in which the legal owner (freeholder) of property agrees to another person using that property or part of it in return for a regular specified payment (known as rent) over a set term. Once the lease expires the ownership may revert to the freeholder or superior leaseholder.

This usually relates to a flat or apartment and is a form of ownership recognised by English law that is for a fixed period of time. The freeholder owns the freehold and the property will usually revert to him at the expiry of the leasehold period.

A licensed conveyancer is a specialist in the transfer of property. Much like a solicitor, except that a licensed conveyancer might not be as qualified in non-property related aspects of the law.

An insurance policy that pays out a lump sum in the event of your death – often used as a form of additional security for a mortgage loan.

Buildings are 'Listed' because they are considered to be of special architectural or historic interest and as a result require special protection. Listing protects the whole building, both inside and out and cannot be altered or demolished without local government consent.

Loan to value refers to the amount of money borrowed (the loan), expressed as a percentage of the value of the property to be purchased or remortgaged (the value). The value of the property is defined as either the purchase price or the valuation, whichever is the lower.

This reveals details of the planning history for the property and whether the Council is aware of any breaches of planning, also any proposals for new roads or traffic schemes, tree preservation orders, conservation areas etc.. that are within the Council's control that may affect the property.

The cost of maintaining and repairing the internal, external or communal parts of a building charged to the tenant or leaseholder.

A property that is arranged over more than one floor often having their own entrance from outside.

A loan to help you buy your house. The loan is secured on the property to prevent you selling the property without paying off the loan. If you fail to meet the mortgage payments as agreed, the lender could force you to sell your home.

The legal document gives the lender certain rights over the property.

An amount charged by your financial advisor, or the lender, to cover the cost of arranging your mortgage.

If the lender is happy with the valuation and references, you'll be made a formal offer approving the mortgage and detailing all terms and conditions. This is usually sent to you and your solicitor.

An insurance policy which covers your monthly mortgage payments should you fall ill.

The lender of the mortgage (i.e.: bank or building society)

Where the size of the mortgage loan is greater than the market value of the property.

An amount of money a buyer wants to pay for a property.

A scheme that provides an independent and impartial facility for the resolution of complaints between those members of the public who buy, sell or let property and the agents they deal with.

A price that a property will achieve on the open market when there is a willing buyer and seller.

A flexible mortgage option that allows you to stop making mortgage payments for up to 6 months.

Cost that may be charged if the borrower repays the loan earlier than the agreed period or switches between lenders.

A lump sum paid up front on rental property.

A person who is buying a property.

A penalty which may be charged by your existing mortgage lender if you pay off your mortgage early or you move to a different mortgage. Always check the details of your existing mortgage before agreeing to redeem it and consider any such implications on a future loan.

Refinancing a property by either switching a mortgage to another lender or by arranging a second mortgage with the existing lender when there is equity gained, due to an increase in the property value.

A mortgage where the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. At the end of the mortgage term, the full amount of the debt will be repaid.

Where the mortgage lender takes possession of the property due to non – payment of the loan.

This is a clause, usually in the original title deeds, which can legally restrict the use/enjoyment of a property. For example,
a builder of a property next to his own might bind the purchaser and future owners never to erect another building on the land.

When the lender holds back some of the mortgage money until certain repairs have been done to the property.

A check on certain recorded aspects that might affect the value of the property, such as a Local Authority Search which covers items such as road maintenance, planning applications etc..

When a seller instructs only one agent to sell their home.

The legal expert handling all the documentation relating to the sale or purchase of a property.

A government tax payable by every buyer of a property over £125,000. Duty is charged at 1% for homes priced between £125,000 and £250,000. The rate is 3% for homes over £250,000 but not more than £500,000. Property over £500,000 attracts “stamp duty” of 4%. There are certain nil-rated bands applying to disadvantaged areas.

A survey giving details about the building and its integrity.

The term used to denote that a provisional agreement between the buyer and the house has been made, but this is not binding on either side.

Temporary occupation of a property by a tenant.

The legal document showing who owns the property.

The formal document that officially confirms the transfer of the property from the seller to the buyer.

An inspection of the property by the lender’s representative to ascertain how much the property is worth to the lender as security for the mortgage loan. This is not to be confused with a structural survey.

The basic rate of interest charged on a loan. This may change as a result of market conditions, so your monthly payments can go up or down.

The legal name for the owner selling a property.