Jargon Buster

A

Agency sales fee
A fixed amount or percentage of the value of your home paid to an estate agent upon completion.
Auction
The sale of a property to the highest bidder.
Annual percentage rate
(APR) the total cost of a loan, including all costs, interest charges and arrangement fees shown as a percentage rate and easily comparable with mortgage interest rates.
Agreement in principle
Provided by a mortgage lender which shows any prospective seller that you can actually get a mortgage to cover the purchase price.
Architects certificate
An alternative for a builder/developer when a NHBC guarantee is not available for a new home.
Appraisal
An estimate of the value of a property as determined by an independent agent familiar with local property values. Most homeowners will normally arrange 2-3 market appraisals of their home prior to instructing a selling agent.

B

Bank of England base rate
The prevailing rate of interest set by the Bank of England which all lenders generally follow.
Banker's draft
Guaranteed by your bank, a banker's draft is seen as more secure than a personal cheque.
Bridging loan
A temporary loan which allows a purchaser to complete on the purchase of a new property before selling the previous property.
Building survey (formerly full structural survey)
Conducted by a chartered surveyor, a building survey is suitable for any house, particularly older properties and those which have been poorly maintained. Upon completion of the survey the surveyor will write up a detailed report.
Buy to let mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out. Buy to let mortgages normally require a higher deposit be put down.

C

Capped mortgage
Normally agreed for a fixed period of time, many lenders 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
An area surrounding a school (i.e. a postcode) in which you must live for your children to be eligible to attend.
CCJ
If someone fails to pay for something and is subsequently taken to court the magistrate may issue a County Court Judgement against that individual to pay the outstanding debt. The CCJ may 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
A legal agreement between the seller and buyer of a property which binds both parties to complete the transaction.
Contract race
If two parties have made an offer on the same house the vendor may decide to sell to the first party 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.

D

Damp proof course
A layer of impervious material (such as mineral felt PVC etc.) incorporated into a wall to prevent dampness rising up the wall or lateral dampness around windows doors.
Deeds
Legal title documents proving ownership. The deeds will be held by the mortgage lender or property owner if no mortgage is held on the property.
Deposit
A sum of money (usually a minimum of 5%) paid by the buyer on exchange of contracts.
Dilapidations
Any disrepair or damage to a rented property.
Disbursements
Fees paid by the buyer's solicitor on the buyer's behalf such as stamp duty, land registry and search fees.
Discharge
Paying off a mortgage
Domestic Energy Assessor (DEA)
A DEA is a qualified person, accredited by the local government, trusted to produce Energy Performance Certificates (EPCs) on residential dwellings. See EPC for mor e info.
Draft Contract
Preliminary, unconfirmed version of the contract.

E

Early repayment charge (ERC)
A charge made by a lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. This normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.
Easement
The legal term for the right to use someone else's property such as a shared driveway or a footpath.
Energy Performance Certificate (EPC)
An EPC contains information about a property's energy efficiency (heating, insulation and so on). It gives a current energy performance rating and a potential energy performance rating (A - most efficient, G - least efficient). With the exception of listed properties, all homes sold or let in the UK must have an EPC that is less than 10 years old.
Exchange of contracts
The point at which signed contracts are exchanged, legally committing the buyer and seller to the purchase and sale of a property at the agreed price. Completion will normally take place at a set time thereafter.

F

Failed valuation survey
When the lender turns down your mortgage application after the surveyor's valuation report indicates the property is not worth the previously agreed asking price.
First time buyer
A person who does not already own a property and is therefore unencumbered.
Fixed rate mortgage
A mortgage in which the interest rate is set for an agreed period of time.
Fixtures & fittings
All non-structural items included in the purchase of a property.
Flying freehold
When part of a freehold property overhangs part of a different freehold property or land.
Freehold
Technical word for the ownership of the property, meaning that it belongs to the owner outright.
Freeholder
The person or persons who own a property outright.

G

Gazumping
If a seller accepts an offer from one party only to accept a higher offer at a later stage from someone else then this is called Gazumping. It is a practice not uncommon in thriving housing markets however it is frowned upon by many.
Gazundering
If a buyer forces a seller into accepting a lower offer for their property just prior to contracts being exchanged by using the threat of pulling out of the purchase completely this is called Gazundering. Again this is a practice frowned upon by many.
Ground rent
The annual charge levied by the freeholder to the leaseholder.
Guarantor
A lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrowers debt if the borrower defaults on his repayments.

H

Homebuyer's survey and valuation (house/flat buyer's report)
This is a survey report, which is not as detailed as a structural survey, carried out by a chartered surveyor to assess the state of a property and its value.
Home Information Pack (HIP)
A regulation phased out by the government in May 2010, Home Information Packs (HIPs) have now been replaced by Energy Performance Certificates (EPCs).
Housing association
A non-profit making body that provides relatively low rent accommodation. They also often run a scheme which lets you buy a percentage of the property and pay rent on the rest (see also Shared Ownership).

I

IFA
Independent Financial Advisor. Someone who provides independent financial advice without being tied to a particular lender.
Interest-only mortgage
There are 2 types of mortgage, interest-only or capital repayment. Interest-only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment vehicle are paid monthly. At the end of the term, the proceeds from the investment vehicle are used to repay the mortgage. The amount will depend on the performance of the investment vehicle. If you choose an interest only mortgage you will be responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
Inventory
A list which describes the condition of furnishings and contents of a leased property at the commencement of the tenancy in order that any dilapidation during the tenancy can be identified. The inventory will then be checked again at the end of the tenancy.

J

Joint agency
This is where you appoint two agents to sell your property. The commission is often higher when appointing more than one agent.
Joint tenancy
People who have a joint mortgage generally have a joint tenancy. This is therefore the way you would generally own a property with your partner. You both have an equal share in the equity of the property and if you die ownership passes to the other partner.

K

No jargon under K

L

Land registry fee
This is paid to the Land Registry to formally register ownership of a property.
Lease
A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for an agreed length of time, after the expiry of which ownership may revert to the freeholder or superior leaseholder.
Leasehold
Denotes that the ownership of the property is by way of a lease.
Listed building
A building officially listed as being of special architectural or historic interest, which cannot be demolished or altered without (local) government consent.
Local authority search
A buyer's solicitor will make an enquiry (search) to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area.

M

Maintenance charge (or service charge)
The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder. Maintenance charges are common on most Leasehold properties.
Mortgage rate
The standard variable interest rate quoted by all mortgage lenders which normally varies with the Bank of England base rate. All discounted rates are based on this mortgage rate.
Mortgage term
The period of time over which (repayment mortgage) or at the end of which (endowment mortgage) the loan is to be repaid.
Mortgagee
The lender of a mortgage (i.e. bank or building society).
Multiple agency
Several agents market your property and the one that sells it gets the commission. Again the commission is normally higher when appointing more than one agent.

N

National House Building Association
A governing body for new homes who will issue a 10 year structural guarantee. Their inspectors will ensure that your new home is built properly and is safe.
Negative equity
When the value of the property falls to less than the outstanding mortgage.
NHBC scheme (National House-Building Council)
A type of building guarantee available on some newly built homes under which defects occurring within a specified time after construction are remedied.
Notice
An official request by the freeholder or landlord to vacate a property. A freeholder or landlord may serve you notice on your home for a variety of reasons and will give you a notice period in which to find alternative accommodation.

O

Off-plan
This is when you buy a new home before it has been built based on the plans and artist's impressions. Discounts can sometimes be available if buying off-plan.
Ombudsman
Independent professional bodies who investigate complaints on behalf of customers against, for example, estate agents, solicitors and insurance companies.
One hundred percent mortgage
A loan for the full cost of the home you are buying if are unable to raise a deposit.
Open market value
The price a property would achieve when there is a willing buyer and willing seller.

P

Part exchange
A new home developer may offer to buy your home and put its value towards the cost of the new home you are interested in buying through them. It is very convenient as it negates the possibility of becoming embroiled in a chain. The downside is that the developer will often offer below market value so they can make a profit when they re-sell it.
Peppercorn ground rent
A nominal periodic rent usually paid annually.
Personal search
This is a manual search by a conveyancer or some other specialist who manually undertakes the same activities as in a local search. These can be completed in a matter of days rather than weeks though they do end up being more expensive.
Preliminary enquiries
The initial enquiries about a property put forward to a seller which the seller must answer before the exchange of contracts.
Probate property
A property that is being sold by the executors of an estate due to death. Probate will need to be granted before a probate property sale can be completed.
Property Chain
If a buyer is reliant upon completion of the sale of his existing property, in order to complete on the purchase of his new property, then he is dependent on his "chain".

Q

No jargon under Q

R

Rebuild cost
Required for insurance purposes and is the cost of completely rebuilding your home if it is destroyed.
Redemption
When a mortgage is fully repaid.
Re-mortgage
Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to draw down any equity gained by a rise in value.
Repayment mortgage
A mortgage repaid by way of monthly repayments of capital combined with interest.
Repossession
When the mortgage lender takes possession of your property due to continued non-payment of the mortgage.
Retention
The lender may hold back part of a mortgage loan until repairs or specified works to the property are satisfactorily completed.
Right of way
The legal term for the right to use someone else's property such as a shared driveway or a footpath.

S

Search
A request or enquiry for information concerning the property held by a local authority or by the land registry.
Septic tank
A tank in which sewage is decomposed by bacteriological breakdown and/or emptied periodically. This is common in properties in isolated areas.
Service charge (or maintenance charge)
The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder. Maintenance charges are common on most Leasehold properties.
Shared ownership scheme
This is where a Registered Social Landlord will provide you with some of the funds to purchase your home with you providing the rest by way of a mortgage. There are various criteria that you must fulfil in order to qualify for a shared ownership scheme.
Sitting tenant
Someone who has a legal right of occupation to a property even if the property is sold to someone else and can apply to the local authority to set a fair rent.
Sold subject to contract
Meaning you have agreed to buy or sell a property but the contracts have not yet been exchanged.
Sole agent
When a seller chooses only one estate agent to sell their home.
Solicitor
Legal expert handling all documentation for the sale or purchase of a property.
Stamp duty
Stamp duty is a government tax imposed on buying a home. Currently the tax is 1% of the property's total value for those valued at between £125k and £250k, 3% for properties valued between £250k - £500k and 5% over £500k.
Subject to Contract
Indicates that an agreement is not yet legally binding

T

Telegraphic transfer
Electronic transfer of money between two parties on the sale/purchase of a property. Will often incur a fee from your solicitor and monies sent from a lender is usually in this form.
Tenancy
The temporary possession of a property by a tenant
Tenancy agreement
A legal agreement designed to protect the rights of the tenant and landlord and setting out all the terms and conditions of the rental arrangements.
Tenure
Conditions on which a property is held (i.e. length of lease).
Title deeds
Documents showing the legal ownership of a property.
Transfer deeds
The land registry document that transfers legal ownership from seller to buyer.

U

Under offer
The status of a property for sale when a seller has accepted an offer from a purchaser but prior to exchange of contracts.

V

Valuation
A basic survey of a property to estimate its value for mortgage purposes. Mortgage lenders will insist on this before lending.
Vendor
The legal name for a person selling a property.

W

No jargon for W

X

No jargon for X

Y

Yield
Income from a property calculated as a percentage of its value.

Z

No jargon for Z