UK Property Jargon – Demystified for YOU

A document that you need to sign and send back to the Lender if you wish to accept the
lender’s mortgage offer.
Additional Security Fee
An up-front, one-off fee paid to the lender to protect them against the borrower defaulting on
the loan. Usually charged on mortgages over 75% of the house value. Also known as MIG,
Indemnity Guarantee Premium and Mortgage Indemnity Premium.
The amount of money that your lender agrees to lend you.
Adverse Credit
Just as it sounds, it is a term used to refer to people with a poor credit history. This may
include but is not limited to, things such as county court judgments (CCJ’s), bankruptcy,
mortgage arrears, Individual Voluntary Agreements (IVA’s) and credit card or other borrowing
arrears or defaults. (Can also be referred to as Non- Conforming).
This is normally a person/company, organisation that has been appointed and who acts on
behalf of a landlord, such as a letting agent, management agent or estate agent.
Agricultural Covenant
This is a very speciOic planning condition that allows the building of a residential dwelling on
the condition that it is occupied by a person employed or associated with working the land in
This is how you are normally referred to by an estate agent/auctioneer when you are the
potential buyer of a property.
This is what is done, usually by an estate agent, when you are selling your property to
determine what they think the correct current value of it is. They will come in and appraise
your property.

Annual Percentage Rate. The amount of interest you will pay on your loan.
Arrangement Fee
Sometimes you might need to pay this fee to lenders for arranging a loan for you.
Assignable Contract
This is when an exchange contract allows you to sell on a property before the completion date.
This is when the ownership of a property is transferred from one person to another.
AST stands for “Assured Shorthold Tenancy” if basically gives a landlord the right to reclaim
their property back after a speciOied period of time. At the moment AST’s tend to be for about
6 months.
This is a means of buying a property in a quick and open way. In an auction house, exchange is
seen as having happened when the auctioneers hammer comes down for the Oinal time for the
winning bid.
OfOicial who repossess your possessions or house if you cannot keep up on your mortgage/
loan repayments.
Bank Automated Clearing System (BACS)
A type of funds transfer that is normally electronically done it is normally free of charge.
Bankers Draft
Different to a cheque in that the money has already been debit straight from your account,
therefore the person receiving the bankers draft is conOident the money will come to them,
whereas with a cheque there is no guarantee there will be any money until it has been cleared.
There is normally an administration fee to obtain a bankers draft, as well as you having to give
a notice period, normally of at least 24 hours.

A place to go for Mortgages & Loans.
Base Rate
This rate is set by the Bank of England and is used as a benchmark for lenders to set interest
rates by. It represents the lowest rate of interest a bank will charge you when it lends you
money. This rate is reviewed periodically thorough out the year and can go up as well as down.
Below Market Value (BMV)
This is what is referred to as buying property under what is deemed to be the current value of
the property.
BeneLicial Owner
This is the person owning land and who is therefore entitled to it for his/her own beneOit. This
is different from say a trust etc that may hold land for the beneOit of someone else.
Block Management
This refers to the agents that manage/act on behalf of the freeholds and leaseholds, normally
for a block of Olats or apartments. The will usually arrange things like, the insurance, tending
the garden, general cleaning and re- decoration.
Booking Fee
Another term meaning arrangement fee.
Break Clause/Release Clause
These are sometimes used in conjunction with Oixed term tenancies. For example: in an AST
after the Oirst 6 months is over when it comes to renewal, either party (landlord or tenant),
will often request that a break/release clause be entered into the agreement, if they are
unsure whether they will want to continue renting the property for the duration of the next 6
months. This clause will normally allow either party to get out (normally with about 2 months’
notice) before the end of the new term.
Bridging Loan
An expensive temporary loan to tide you over when having to buy your new house before
selling your old home.
This is a person that advises on mortgages etc. Known as a mortgage broker.
Building Insurance
This is a type of insurance that is required to cover against the structure of your property
being damaged or destroyed. The sum that is insured covers the estimated cost of rebuilding
the property. (keep in mind this can vary greatly from the market value of the property.)
Building Society
Another place to go for Mortgages & Loans
Buy to Let (BTL)
This is a speciOic mortgage that allows you to buy a property with the main aim being to Oind
tenants and let it out. The income from renting the property out is taken into consideration by
the lender.
The total amount – sometime referring to sum borrowed in a mortgage – sometimes the
amount you have left in a property after the mortgage has been repaid.
Capital and Interest Mortgages
With a capital and interest mortgage the monthly mortgage payments pay off both the initial
loan (i.e. cost of the property) and any interest that has been charged. Therefore, at the end of
the loan term, the entire debt will be repaid with nothing outstanding. (also know as a
repayment mortgage).
Capital Rest Period
This is to do with the regularity with which the Lender calculates the outstanding balance on
any give mortgage and hence the size of the monthly repayments. This Oigure is normally
calculated annually, monthly or daily.
Capped Rate
This is a rate of interest that you agree to with your lender that will be the maximum you will
pay during a set period of time. This is period of time is often the Oirst 1-3 years of the
mortgage starting, but it can be for longer. The interest rate cannot go any higher than this
capped rate during this speciOied period of time.
Cash Back Mortgage
See Cash Back on completion.

Cash Back on Completion
This is where you get a lump of cash from the mortgage lender on the completion of a sale.
Cash on Cash Return
This is the same as Return on investment.
These are entries that are on a land register to protect the interest of a third part.
This occurs when the seller needs the sale of their house to occur before they can complete
the purchase of another property. The same situation may exist for others in the chain. As a
result, the whole chain can collapse if one link breaks.
Chain Free
This is simply when a potential buyer does not need to sell a property in order to buy a new
one hence they are “chain free”. First time buyers are often chain free.
The term attached to a property by the lender to give security against the asset. It means that
they have a right to the property value should it come to a sale.
Charge CertiLicate
This is a certiOicate issued to the lender by the Land Registry that gives evidence of the
lender’s charge over the property.
Chief Rent
This is a payment made on freehold land to the original freeholder forever. This differs from
ground rent because ground rent normally has a limited period.
The property is what is classed as collateral. It is seen as a guarantee that you will be able to
pay the lender the loan. If you aren’t able to repay this loan the property could be sold by the
lender in order to recoup the money they originally lent you.
Company Let

This is when you have let your property to a speciOic bona Oide company.
This is the Oinal stage of the buying process. The ownership is legally transferred from the
seller to the buyer.
Compulsory Purchase Order
(CPO’S) are normally issued by local authorities and they enable an authority to purchase a
property whether the seller wishes to sell or not.
Contents Insurance
Insurance to cover any loss or damage to your possessions.
Contract Race
This is what sometimes happens when two potential buyers want to buy the same property.
The seller will normally be the one to instigate the contract race but it can also be instigated
by a buyer. The winner of the race will be the Oirst buyer to be in a position to exchange
The legal documents needed to transfer the ownership of property they are signed by both the
seller and the purchaser.
This is a Olexible term in property and can mean such things as a house that has been
converted into Olats or a loft converted into a bedroom, as well as other things.
Legal work involved in buying and selling a house.
County Court Judgement (CCJ)
You can get a CCJ if you default on a payment of debt. If you do get a judgment against you may
have difOiculty in getting credit in the future.

The covenants are the terms of any given tenancy agreement. They include any obligations or
promises made by either the Landlord or the tenant. They are requirements by law on the
owner of a property that they will either do or not do something with their property.
Credit Search References
These are references taken regarding a potential tenant. These references can be from sources
such as the tenant’s employer. A check of the tenant’s credit history is also often carried out.
Current Account Mortgage
This type of mortgage is a Olexible mortgage that can keep all your Oinances in one place. It
combines your mortgage with a current account and the money in the current account can be
automatically set against the mortgage balance and then interest only charged on the
outstanding amount of the loan. In practice this should mean that interest payments should be
These are the legal documents associated with a property.
Decision in Principle (DIP)
‘Mortgage Promise’ or an Agreement in Principle’ (AIP), a mortgage in principle is a certiOicate
or statement from a lender to say that in principle they would lend a certain amount to a
particular prospective borrower or borrowers based on some basic information.
This is when you have failed to make payments as you have agreed to. In property terms this is
normally used when talking about missed payments on your mortgage.
Delayed Completion
Completion is classed as delayed if they take over 28 days to complete after exchange of
contracts a delayed completion needs to be agreed before exchange of contracts.
This is normally a lump sum paid to the seller towards the overall cost of the property it is
normally held by solicitors until completion of contracts.
Direct Debits

Direct debits are used to make payment directly from a bank account. Direct debits are used
usually used when the amount being paid might vary otherwise Standing Orders are used.
Direct Lenders
A new form of mortgage lender who deals solely over the telephone.
Expenses paid by the solicitor on behalf of the purchaser.
Discounted Rate
A Discounted rate mortgage will have an interest rate lower than the lender’s Standard
Variable Rate.
Discounted Tracker Rate Mortgage
This is a variable rate mortgage that is discounted from the Bank of England’s base rate. It is
usually discounted by a set percentage for a set period of time. In practice there are usually
early repayment charges that will be charged if the loan is repaid within the discounted
Double Agent
An agent who is acting on behalf of both the buyer and the seller in practice this is a term
sometimes used for an Estate Agent who reveals the seller’s lowest asking price to the buyer
in order to make a quick sale. An agent should be acting on behalf of only their client who is
generally the seller.
Early Repayment Penalty (ERP) / Early Redemption Charge (ERC)
This is a fee that is sometimes charged if you pay off all or part of your mortgage before a preagreed
Endowment Mortgage
Type of mortgage where monthly payments are made into a endowment (life assurance)
policy. The loan is paid off in one lump sum at the end of the loan period.
Energy Performance CertiLicate (EPC)
This certiOicate is part home information pack and gives you information as to how energy
efOicient your home is in a similar way to the stickers you see on fridges.

This is the Oinal and formal version of a document that has been prepared by a solicitor in
preparation for signing following the agreement of the Oinal draft between parties.
Equitable Interest
This is when someone has some legal rights to a property but these rights do not include the
right to sell its legal title.
This is the difference between the market value of a property and the amount of the mortgage
that is still owed to the lender on that property.
Estate Agent
Property agents who link up buyers and sellers. Estate Agents advertise houses & arrange
The initial sum you have to pay on an insurance claim.
Exchange of Contracts
The point at which buyer and seller are legally bound to the sale and purchase of the property.
Exclusive Mortgage
This mortgage is called an exclusive mortgage because it is only available through a speciOic
packager in conjunction with the Lender who is going to provide the funding.
This is when a deed is signed, sealed and delivered in front of an independent witness.
Execution Only
This is a service with no advice, just carried out the orders of a customer.
Failed Valuation Survey
When the lender turns down your mortgage application after reading the surveyor’s valuation
Fixed Rate Mortgage

This is a mortgage which has a ‘Oixed’ rate of interest for a set period of time normally between
1-5 years.
Fixtures and Fittings
Any items not included or included in the sale of the property. For instance, curtains, carpets,
wall lights, cooker etc. These are generally agreed on a document sent by the seller’s solicitor
to the seller to complete, this document is then passed over to the buyer’s solicitor for the
buyer to read.
Flexible Mortgage
These are mortgages that allow you to pay them off in a Olexible way, one example of this are
mortgages that allow you to make overpayments so that you can pay off your mortgage early.
Flying Freehold
A Olying freehold is formed when part of a freehold property overlaps onto a different freehold
property or land.
This is when you have complete ownership of a piece of land and the property that resides on
Full Status
This describes a borrower who has a good credit history and who is not self-certifying his
Gas Safety Regulations
A landlord must make sure that a gas safety check is carried out prior to letting out any
property. Then it needs to be completed annually and a copy of the record must be given to the
tenant. This check must be carried out by an authorised CORGI register engineer.
Gazumping is when a vendor accepts an offer from one person only to later reject it in favour
of a higher offer they receive from someone else.
This is a term used when a buyer reduces his offer moment before exchange.

This is the amount of money you have against the amount of a loan. You can be ‘highly geared’
which is owning very little of a property with a very big loan or ‘lowly geared’ which is when
you have very little debt against an asset. Also see ‘negative gearing’.
Gifted Deposit
This means that someone has gifted you the deposit on a property. This would normally have
been a developer on a new build property you are buying. In practice it is an incentive to
encourage you to buy the property as is similar to ‘cashback’ on a mortgage. Don’t be too
fooled there is after all no such thing as a free lunch.
Ground Rent
Ground rent only applies to leasehold properties and is a sum paid annually to the Freeholder
of the property, by the leaseholder. There are normally service charges also attached.
This is a person who agrees to guarantee that they will repay a loan or debt if you default on
the payment of it. A typical example of this is when a parent guarantees the mortgage will be
paid on their son/daughter’s Oirst property purchase.
High Rent Tenancy
This indicates a tenancy agreement when the annual rent on a property is over £25,000 and is
known as a contractual tenancy.
Higher Lending charge
See Additional Security Fee
House in Multiple Occupation – bedsits come under this category. They are the subject to more
rules and regulations than the average property
Home Information Pack (HIP)
This is also known as a seller pack and have been legally required on all properties that are
sold in on the open market since Dec 14th 2007. You have to have one as you cannot sell most
properties without one so whether you question their value as most do or not its best to get
one in plenty of time.
Home Report (HR)

Property for sale in Scotland have to be marketed with a Home Report. This is a pack of three
documents; a Single Survey, an Energy Report (EPC) and a Property Questionnaire
The Single Survey contains an assessment by a surveyor of the condition of the home, a
valuation and an accessibility audit for people with particular needs.
The Energy Report contains an assessment by a surveyor of the energy efOiciency of the home
and its environmental impact. It also recommends ways to improve its energy efOiciency.
The Property Questionnaire is completed by the seller of the home. It contains extra
information about the home, such as Council Tax banding and factoring costs that will be
useful to buyers.
The Home Report is made available on request to prospective buyers. There is no legal
requirement to update the Home Report provided the house remains on the market.
IFA stands for “Independent Financial Adviser “and means someone that has undergone
speciOic training and has obtained speciOic qualiOications to give Oinancial advice and to act
independently without being tied to only recommending the products of any particular lender.
Improvement Grant
This is a grant given by the local authority towards the repair of the improvement of a
Income Multiples
These are the multiples that the Lender will apply to the borrower’s income when trying to
decide what the maximum they will lend them for their mortgage is. It is worked out based on
what you are likely to be able to afford. Traditionally you could borrow 3.5 times your salary
but in headier times 5 or even 6 times a salary was available.
An up-front, one-off fee paid to the lender to protect them against the borrower defaulting on
the loan. Usually charged on mortgages over 75% of the house value. Also known as MIG,
Indemnity Guarantee Premium and Mortgage Indemnity Premium.
Indemnity Guarantee Premium
An up-front, one-off fee paid to the lender to protect them against the borrower defaulting on
the loan. Usually charged on mortgages over 75% of the house value. Also known as MIG and
Mortgage Indemnity Premium.

Individual Savings Account (ISA)
They are a way for people to save cash or shares without paying tax. They are also seen as a
savings vehicle associated with interest only mortgages so you can repay the loan amount at
the end of the term.
Inheritance Tax
Also known as Death Duties it is a tax on everything you own when you die. It is a good idea to
properly consider inheritance tax with a Oinancial advisor especially if you have dependents.
This is when you given an estate agent or auctioneer the right to sell your property. The
resulting agreement between you and them conOirms the terms under which the “instruction”
is offered by you and accepted by the estate agent or auctioneer.
Interest only Mortgages
This is when you are only paying off the Interest on the mortgage over the term of the loan.
You are not actually paying any of the mortgage amount itself. For this reason, Interest only
mortgages are often tied in with some other type of investment vehicle which is set up to
cover the initial loan amount at the end of the mortgage term. This investment vehicle
includes things like, ISA’s endowment policies and personal pensions.
This is where your assets sit if you have not made a will before you die whilst it is decided who
Introducer Fee
This is just as it sounds and is a commission that is paid by the Lender to intermediaries for
introducing business to them. At the time of writing, if this intermediary receives a payment of
more than £250 they are then obliged under the Mortgage Code to disclose to the borrower
the exact amount they received. (This is also sometimes referred to as a Procuration Fee).
This is a listing of the contents of any given property. This can include things like kitchen
utensils and garden equipment etc. As well as the condition a property is in and the structural
Oixtures, Oittings and power points etc. It is generally associated with rental properties let on
an AST.
Joint Tenants

This is when two or more people are co-owners of a property. When one dies, their share of
the property automatically passes to the other/others.
Joint/Multiple Agency
This is when you have instructed more than one estate agent to market your property. This
can sometimes mean that you are paying higher commission fees because they are not your
sole agent.
Joint/Several Liability
This is when there is to be more than one adult living in a property. Tenants tend to be ‘joint
and severally liable’ which means that they are liable together but also individually each
tenant is responsible for payment of all rent and all liabilities.
Land CertiLicate
This is a certiOicate that is issued by the land registry that proves ownership of land.
Land Registry
This is a government department where details of the ownership of properties and any
charges against these properties are held.
A landlord can be a person, group of people, company or some sort of body that has a formal
interest in a property and has the right to let that property out to tenants.
Document in which the owner of a freehold property lets out their premises to a named party
at a certain price and for a speciOied time.
This when a leaseholder is granted the right to use land/property for a Oixed period of time.
This ownership is subject to the annual payment of ground rent to the owner of the freeholder.
Lease Option
A lease option is a type of contract used in both residential and commercial property. In a
lease option, a property owner and tenant agree that, at the end of a speciOied rental period for
a given property, the renter has the option of purchasing the property.

A company or person who lends you money for an agreed time period. Interest is generally
Lender’s Arrangement Fees
Charge passed on to the buyer by lender for arranging a loan.
Lender’s Legal Fees
The fees incurred by the lender when arranging a mortgage. These costs are generally passed
onto the buyer.
Lender’s Valuation
A valuation of the proposed property carried out by the lender before agreeing to give out a
mortgage. This is only a valuation survey. A separate survey may be required by the buyer.
This is the person etc. that grants a lease.
Let to Buy Mortgage (LTB)
This is a mortgage that allows you to borrow money to buy a new home to move into while
your current home is let out to tenants. The maximum you can borrow for your new mortgage
will generally be calculated without taking your existing mortgage on your current home into
consideration, as long as the rent covers the mortgage on the current home.
Libor-Linked mortgage
This is a variable rate mortgage that is linked to the London Inter-Bank Offered Rate and will
normally be set at a certain percentage above the Libor rate within a given period of time. The
Libor rate is often associated with lenders that offer Loans to borrowers with some sort of
adverse credit history.
This is a term used for the legal right of one person to hold someone elses property as security
for a debt.
Life Assurance
An insurance policy which pays out a Oixed lump sum on death of an individual.
Life Policy

This is a policy/insurance that repays the mortgage in the event of the insured person’s death.
(This can also be known as Term Assurance).
Loan-to-Value (LTV)
A percentage expressing the size of mortgage against the value of house. For example, if a
House Value is £100,000, with a Mortgage Size of £90,000, the loan-to-value = 90%.
Local Authority Search
A search carried out by the Solicitor to Oind out if there are any Local Authority Notices, with
respect to the building itself (e.g. has it been condemned?), and the surrounding area (e.g.
have plans gone through to build a motorway next to the house?) there are many different
searches that can be carried out an average house requires 2/3 but some may require say a
mining search.
Maintenance Charge
This is the charge that will have been agreed in the initial contract with the landlord that
covers costs of maintaining a property. Depending on the type of property in question, this
will typically include things like keeping the garden and communal areas and outside of the
property in good order.
MIG – stands for “Mortgage indemnity guarantee” and is an insurance premium that lenders
sometimes require you to take out in certain situations but often when there is some
uncertainty as to a right on the property.
Mortgage Interest Relief At Source. Tax relief available on interest payments on the Oirst
£30,000 of your mortgage. Phased out in April 2000 by the Government.
A long term loan to fund the buying of a property.
Mortgage Deed
This is a document that details the conditions of a loan/mortgage secured on a property.
Mortgage Indemnity Premium

An up-front, one-off fee paid to the lender to protect them against the borrower defaulting on
the loan. Usually charged on mortgages over 75% of the house value. Also known as
Indemnity Guarantee Premium or Mortgage Indemnity Premium.
Mortgage Offer
This is normally in letter form from the lender offering you a loan and setting out the
conditions by which it is offered.
Mortgage Payment Protection Insurance
See Accident Sickness and Unemployment Insurance as they are essentially the same thing.
Mortgage Term
Period over which mortgage is to be repaid.
The lender of a mortgage.
The house buyer who takes out a mortgage.
Multiple Agency
See Joint/Multiple agency earlier in this property glossary page.
Negative Equity
This is when you owe more money to the lender than the actual market value of your property
Negative Gearing
This is when the amount of rent that a property brings in is less than the cost of the mortgage.
Bear in mind tax must be deducted from the income before a loan can be repaid.
Just as it sounds, it is a term used to refer to people with a poor credit history. This may
include but is not limited to, things such as county court judgments (CCJ’s), bankruptcy,
mortgage arrears, Individual Voluntary Agreements (IVA’s) and credit card or other borrowing
arrears or defaults.

This is when you make an offer for a property – this may be at the asking price or less or in
some cases more.
Offset Mortgage
This is a Olexible mortgage that allows credit in one account to be taken into consideration
when calculating the interest due on different mortgage.account. For example: Money in your
savings or current accounts is set against your mortgage balance and then interest is only
calculated and charged on the outstanding amount. In practice this should mean that your
interest payments are reduced.
OMV stands for “Open Market Value” and is the value a property can achieve in the open
market when there is both a willing buyer and willing seller.
Option Agreement
You generally have to buy an option for an agreed amount of money. It gives you a set time
when the vendor can’t sell it to anyone else although you are not legally tied to a purchase.
This is when you make an unscheduled capital repayment i.e. you pay over what was agreed
initially. This can be an effective way of repaying your mortgage before the end of the term and
saving yourself a considerable amount of interest. With some mortgages you will be charged a
fee for overpaying or for overpaying over a certain amount.
Relates to a mortgage packager; people that get all the documents relating to your application
to a lender, ready for you.
PCM stands for “Per Calendar Month” and is normally used when talking about the rental
Oigure per calendar month (PCM).
Pension Mortgage
Monthly repayments made up of a) Interest on loan and b) contribution to a personal pension
scheme. The loan on the house is paid off in one lump sum at the end of the loan period. This
can be a tax efOicient way to save.
Peppercorn Rent

This is a term used to mean a ground rent that is of a trivial sum in reality no actual money
changes hands.
Personal Equity Plan (PEP)
Personal Equity Plans (PEPS) were tax efOicient investments that where available in the 1980’s
and 1990’s. Many people used them as an investment vehicle to go along with an interest only
Portable Mortgage
A portable mortgage is one which allows the borrower to move their mortgage from one
property to another without penalty within an early repayment charge period. Portable
mortgage can be very important, for example: if there are early repayment charges for the Oirst
3 years on your mortgage, then if you wanted to move house after say 19 months and didn’t
have a portable mortgage, then you would have to pay the charges and then get a new
mortgage product.
Preliminary Enquires
These are set of questions that are raised by solicitors on the sale/purchase of a property.
They can be completed in advance of an agreed sale (along with a Oixtures and Oittings form) to
avoid any delays once a property is under offer.
The monthly amount payable to an insurance policy.
The sum of the loan on which interest is calculated.
Private Residence Relief
A tax relief relating to your principal home.
Probate is the ofOicial process of proving a will is valid. If the will involves a property, things
such as inheritance tax etc need to be taken into account. A probate valuation can be obtained
which is normally a negotiated value with the district valuer who represents the Inland
Revenue. It is vital for a potential purchaser and the seller to understand that the sale of a
property in this situation cannot proceed to exchange until probate is granted.
Procuration Fee

See Introducer Fee
Public Liability Insurance
Insurance which covers injury or death to anyone on or around your property.
When a mortgage if fully repaid.
This is what is done to check a potential tenant’s suitability to rent a property. Such things as
contacting previous landlords, present employer and doing a general credit check can come
under this category.
Registered Land
This is land (including any property on it) which is registered at the Land Registry.
Release Clause
These are sometimes used in conjunction with Oixed term tenancies. For example: in an AST
after the Oirst 6 months is over when it comes to renewal, either party (landlord or tenant),
will often request that a break/release clause be entered into the agreement, if they are
unsure whether they will want to continue renting the property for the duration of the next 6
months. This clause will normally allow either party to get out (normally with about 2 months’
notice) before the end of the new term.
Relocation Agents
Specialists in Oinding houses and assisting with negotiations.
Rental Agreement
This is the document that contains all the details and terms and conditions of the tenancy. An
AST is a form of tenancy agreement. It is a legally binding document.
Repayment Mortgage
Both capital and interest on the loan are paid off in monthly instalments.
When the mortgage lender takes possession of your home because you have fallen too far
behind on your mortgage repayments. You will be removed from the property.

This is an amount of money that is held back from the initial loan and will not be paid out by
the lender until speciOic repairs or improvements have been carried out by the purchaser.
Return on Investment (ROI)
This term refers to how much you get out of an investment in comparison to how much you
have put into it. For example, if you have invested £100,000 and got £125,000 out it would be
a 25% return on your investment.
Return on Time Investment (ROTI)
This is the hourly return on any time expenditure as valued in pound amount per hour.
This is a special type of property purchase. You have an agreement with the vendor that they
can still continue to live there for a speciOied time, normally until they die or some other
signiOicant agreed event happens.
Right of Way
An individuals legal right to use any particular part of a property so as to gain access to their
own property.
Right to Buy (RTB)
This is when a tenant living in a council-owned (or sometimes housing association or other
social housing owned) property, can purchase the property at a discount. Generally the size of
the discount depends on the length of their tenancy. In the 1980’s and 1990’s there could end
up being a sizable discount, but these days the discount is often capped, no matter how long
you have lived there.
Sale and Rent Back (SARB)
This is when you buy a property and then rent it back to the people you have bought it off. It is
often seen as an investment.
Searches are carried out by solicitors to Oind out whether there are any unwanted/adverse
effects in relation to a particular property. They will cover both existing issues as well as

Self Build
This is when you build the property yourself. If you are a builder you could literally build it
yourself otherwise you can commission builders, surveyors etc to be involved with the
planning and building.
Self Build Mortgage
This is a mortgage that is taken on to build a property. The loan amount is generally paid out
in stages as the building is progressing.
Self CertiLication Mortgage (S/C)
This is a mortgage where a buyer does not provide evidence of there income but instead they
state their income and sign a conOirmation of their ability to repay the mortgage. Normally the
rates of a self certiOication mortgage will be higher than those of a standard mortgage and a
larger deposit is required.
Sellers Pack
This is also known as a Home Information pack (HIP) and has been legally required on all
properties that are sold in on the open market since Dec 14th 2007. You have to have one as
you cannot sell most properties without one so whether you question their value as most do
or not its best to get one in plenty of time.
Gas, electric, water and council tax. In most AST’s the tenant will be responsible for the cost of
Shared Ownership
This is a scheme that is operated by various Housing Associations where the borrower buys
and owns part of a property i.e. a percentage such as 40%, 50%, 75% etc and they pay a
mortgage on the percentage they own. The Housing Association owns the rest of the property
and the borrower pays rent to the Housing Association on this. The borrower would normally
have the right to purchase a higher percentage of the property in the future.
Sitting Tenant
This is when someone occupies a property as a tenant but has not signed an AST and so
therefore cannot be asked to leave.
Sole Agent

When a seller chooses only one agent or service to sell their home.
Sole Selling Rights
This is where one agent has complete control over the sale of a particular property. This agent
is generally entitled to his fee however property is sold.
Legal Professional who acts on behalf of the buyer or seller in the purchase of a house. The
solicitor will check the legal position of the house, carry out Local Authority Searches, Land
Registry Searches check monies are in place and oversee the exchange and completion of
contracts between the two parties.
Split Loan
A split loan is a mortgage that can be taken partly on a capital and interest basis and partly on
an interest only basis.
Stamp Duty
A Stamp Duty is the tax placed on legal documents usually in the transfer of assets or property.
See for a comprehensive break down and
associated fees.
Standard Variable Rate (SVR)
This is the default variable rate the Lender offers to borrowers on their standard residential
mortgages. It is also normally the rate that mortgage is reverted back to at the end of any
special discount period.
Standing Order
This is what you would normally get a tenant to set up to pay you rent directly. It is called a
standing order mandate and is the instruction to the tenants bank to pay you a set Oigure on a
regular basis for example £850 rent on the 1st of each month.
Structural Survey
A report constructed by the surveyor detailing Oirstly, whether the house is structurally sound
and secondly, listing the major/minor defects, (including the necessary work which needs to
be done).
Studio Flat/apartment

This is a Olat or an apartment with the bedroom/living room all in one. It will normally have
either a separate kitchen or a kitchen in the corner of the main room. It will still have a
separate bathroom and loo.
Subject to Contract
This is a term that is associated with an agreement to purchase a property before exchange of
contracts. At this stage either party is still free to pull out of the transaction.
Superior Landlord
The superior landlord is the landlord who the ownership of a property might revert to at some
stage for example; a Olat with a 99-year lease.
Superior Lease or Head Lease
This is often applicable to a Olat that is rented out. There will be a freeholder, a leaseholder
who has a superior or head lease and then they may grant a lease generally as an AST to a
tenant to actually occupies the property though they must comply with the terms of both their
lease and the Head Lease.
A term that covers various types of surveys from a valuation survey which is a report that is
produced on a property to determining the value of the property, whether it is structurally
sound and whether the lenders money will be secure to a full structural survey which gives
much more detailed information. This report is done by a qualiOied surveyor upon inspection
of the property. You generally have three tiers of report available: Valuation, Home Buyers and
Structural. The structural is the most in-depth and hence normally the most expensive.
The person who carries out a survey of a property, examining the structure and general state
of the house.
Tax Relief
Tax relief available on interest payments on the Oirst £30,000 of your mortgage. Phased out in
April 2000 by the Government.
Tenancy Agreement
This is the document that contains all the details and terms and conditions of the tenancy. It is
also known as a rental agreement. An AST is a form of tenancy agreement. It is a legally
binding document.

Tenancy at Will or Licence
This is when a purchaser wants to gain access to the property before legal completion. This
can be for anything from measuring up to actually beginning renovations etc. This can be
organised formally through the solicitors and a licence arranged between both the vendor and
the buyer. In this situation the buyer sometimes agrees to pay an appropriate rate of interest
on the balance of money owed for the property (i.e. the purchase price of the property less the
deposit that they have already paid). They will pay this instead of paying rental.
T enant
A tenant is a 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.
Tenants in Common
This is when two or more people are co-owners of a property. When one dies, their share of
the property automatically passes to the other/others.
Tender – For Sale by Tender
This is when an asking price is not stated but offers are invited in writing. There will be a set
time and date for the offers to be opened and it will usually be in the presence of the vendor’s
solicitor. Normally an acceptance of an offer by the vendor constitutes an immediate
agreement subject to contract.
This is relating to whether a property is freehold or leasehold, it denotes the type of
ownership a property has.
The period that the mortgage will last for.
Term Assurance
This is a policy/insurance that repays the mortgage in the event of the insured person’s death.
The legal right to ownership of a property.
Title Absolute

This is the highest form of tenure available. (see a bit further up this property glossary page
for an explanation of tenure).
Title Abstract of
This is a summary of the title documentation that is used in the conveyancing of unregistered
properties to prove that the vendor has the right to sell that particular property.
Title Deeds
These are legal documents that describe the rights and the liabilities that are attached to a
property and they also prove ownership of a property.
Title Report
A report from the land registry that conOirms that the title of a property is acceptable. This is a
vital certiOicate that a lender must have before they will issue the cheque for mortgage monies.
Tracker Mortgage
This is a mortgage that moves in line with the Bank of England base rate and for a set period of
Under Offer
This is when a vendor has accepted an offer for the property but contracts have not been
exchanged on it yet. At this stage either part can still withdraw from the sale/purchase of the
Vacant Possession
This is when the property is vacant. The previous occupants of the property must vacate the
property before you move in.
V aluation
The process of evaluating a property to determine its market value. In some cases, there may
be a cost for this service by a professional, this cost is referred to as a Valuation Fee.
Valuation Survey
A survey carried out by the lender to ensure that the house’s value is not less than the
proposed loan. Often the lender will arrange the survey and bill the buyer. This cannot be used
as a structural survey. It is also a service offered by estate agents or other property
professionals to try to ascertain the value of your property in the current market.

V endor
This is another word for the person who is selling a property.
Vendor Deposit
This is when you use creative Oinancing to get the vendor to pay the deposit or part of the
deposit for you – generally used by developers.
Yield is the ‘return’ on a property investment on a yearly basis. The two main ways to look at
yield are gross yield and net yield.
Yield (GROSS)
This is a measure of your return on investment before tax, in the form of rental income
compared to the property’s price.
Yield (NET)
This is a measure of your return on investment taking into account any expenses incurred.

Paul McFadden
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