Glossary of commonly used property and letting terms

ARLA
The Association of Residential Letting agents

arrangement fees
fees which relate to a specific mortgage product



bridging loan
a short term loan (usually at a very high rate) to finance buying a new property before one has actually sold one's existing property

buildings insurance
insurance against the damage or destruction of the permanent structure of a property.

bungalow
a house with only one storey.

buy-to-let
buying property with the express intention of letting it out to tenants after the purchase.


capital and interest
a mortgage repayment option whereby the amount borrowed (capital) and the interest accrued are paid back on a monthly basis to the lender.

Capital Gains Tax
the taxable profit derived from the sale of a capital asset - the difference between the sale price and the basis of the property, after making appropriate adjustments for closing costs, fixing up expenses, capital improvements, allowable depreciation, etc.

capped rate mortgage
this is where your mortgage interest rate is guaranteed not to rise above an agreed fixed rate for a defined period of period of time.

completion
the point at which all transactions concerning the property’s sale are concluded and legal transfer of ownership passes to the buyer.

condominium
an apartment building in which each apartment is owned separately by the people living in it, but also containing shared areas.

conservatory
a glass room, usually connected to a house, which is often used as a dining area, playroom, or sitting room.

contents insurance
insurance to cover the damage or loss of items and belongings within a property.

contract
a legal document that details the agreement between buyer and seller that binds both parties to complete the transaction.

conveyancing
a term to describe the legal work involved in a property transaction that is conducted by a property solicitor.

covenants
agreements written into title deeds which detail an rules or restrictions concerning a particular property.

credit check
a search most commonly invoked by a lender through a specialised company to ascertain if an individual has CCJs or a bad payment history.

credit scoring
a numerical value that ranks an individual's credit risk at a given point in time based on a statistical evaluation of information from a credit search.

deeds
a document detailing the ownership of a property, usually held by a mortgage company.

deposit (for buying a property)
a sum of money (most commonly 10%) paid by the buyer of a property to a mortgage lender upon exchange of contracts.

deposit (for renting a property)
a sum of money (usually a month's rent in advance) paid to the landlord (or agent) of the property, which is returned at the end of the tenancy, subject to the condition of the property.

dilapidations
any disrepair or damage to a rented property.

disbursements
fees paid by a solicitor on the buyer’s behalf such as Land Registry fees, stamp duty and search fees.

duplex
an apartment or flat spread over two floors.

en suite
a bedroom constructed with its own toilet and bathroom (i.e. it does not share these facilities with any room).

equity release
a means of retaining the use of your house or other object which has capital value, while also obtaining a steady stream of income, using the value of the house.

estate agent
a business that arranges the selling, renting (letting agents) or management of homes, land and other buildings

excess
the amount you have agreed to pay an insurance company towards the cost of a claim.

exchange of contracts
when contracts are exchanged between the buyer's and seller's solicitors, legally committing both parties to the sale/purchase of the property at the agreed price.

fixed rate mortgage
where the interest rate on a mortgage is fixed for a set period of time, meaning monthly repayments are unaffected by upward or downward movements in the standard variable rate.

flat
a set of rooms for living in which are part of a larger building.

flexible mortgage
a mortgage product that offers the borrower the flexibility to overpay or underpay on their mortgage in a given month.

freehold
the ownership of a property, meaning that it belongs to the owner without the limitation of time.
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gazump
when a seller accepts a higher offer from a third party on a property that they have already agreed to sell to another party, but have not yet exchanged contracts.

gazunder
when a buyer offers the seller a lower offer than the previously agreed selling price just before contracts are about to be exchanged.

ground rent
an annual charge levied by the freeholder to the leaseholder.

guarantor
a individual who offers to be contractually liable, both financially and legally, should a tenant fail to pay the rent during their tenancy, or in the event of damage to the property.

guide price
an indication of the price that the property is expected to sell for and what the vendor is hoping to achieve.

HMO
House in Multiple Occupation

Home Information Packs (HIPs)
a series of documents (including an Energy Performance Certificate) recently introduced by the UK government to speed up the home buying and selling process and also to save consumers money on house sales and purchases which, for one reason or another may not complete.


IFA
Independent Financial Adviser.

Inheritance Tax
a tax paid to the government based on wealth (money, property, etc.) passed from one person to another during their lifetime or as part of their estate after death.

insurance
an agreement in which you pay a company money and they pay your costs if you have an accident, injury, etc., or if your property or possessions are damaged or lost.

interest-only mortgage
a mortgage repayment option, whereby the borrower only repays the lender the interest on the amount borrowed - the borrower must still pay back the capital, or amount borrowed (usually through an investment vehicle).

inventory
a list detailing every item contained within a rental property and the condition each listed item is in, usually checked by all parties on the day the tenant moves in and signed by all parties.

joint sole agency
the use of more than one estate agent to sell your property simultaneously.

Land Registry
a government body which maintains and updates records of land ownership and property ownership.

Landlord Insurance
specific insurance taken out by landlords to cover their properties and investments – usually the contents and buildings insurances cost more than for owner occupiers owing to the greater amount of risk.

leasehold
a legally binding document whereby the freeholder grants the right for the leaseholder to possess, or the use of land or a building for a specific period of time.

lender
usually a business, such as a bank or building society from whom one borrows money, or to whom one owes money.

letting agent
a business that arranges the letting or management of homes rented on behalf of private and corporate individuals.

lifetime mortgage
a form of equity release, whereby one can borrow an amount of money against part of, or all, the value of your home, and interest is charged on the amount you borrow.

loan to value
the size of a mortgage relative to the property's value.

local authority search
when a solicitor makes an enquiry to the land registry to ascertain if there are any future development issues or outstanding enforcements that might affect a property or surrounding area, which might influence the decision to purchase the property.

maisonette
a property arranged over more than one floor, usually as part of an existing house.

managing/management agent
a third party business that manages the letting of properties, in exchange for a fee, on behalf of a landlord or property owner.

mezzanine
a small additional floor between one floor of a building and the next floor up.

mortgage deeds
a legal document detailing a lender's interest in a property along with the terms of the mortgage.

mortgage
an agreement which allows you to borrow money from a bank or lender in order to buy a property.

mortgagee
a bank, or similar organisation, which provides mortgages to people especially so that they can buy a property.
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NAEA
National Association of Estate agents

negative equity
when the value of a property is less than the value of the mortgage outstanding on a property.

new-build
a house or flat that has been built from scratch by a building company or developer to be sold on.

NHBC
National House-Builders Council

off-plan
the purchase of a property before the building work itself has started, or has been completed.

Ombudsman
independent professional bodies that deal with complaints by consumers made about particular organisations, such as estate agents. (Ombudsman of Estate agents)

open day
when a property is opened up to prospective buyers to view over a set period of time to increase the competitiveness of a property sale.

penthouse
a luxurious apartment, or set of rooms, at the top of a hotel or tall block.

property search agent
a company that will find and arrange viewings for particular properties to buy or rent matching your search criteria on your behalf.

rebuilding cost
the cost of fully rebuilding a property, usually requested as part of a buildings insurance policy.

redemption
when a mortgage is paid off in full.

repayment mortgage
a mortgage where monthly repayments include both the capital and interest components, meaning at the end of the term, the mortgage will be paid off in full.

repossession
when a mortgage company takes possession of a property, primarily due to non-payment of a mortgage.

rent
a fixed amount of money that you pay regularly to the owner of a property for the uninterrupted use and enjoyment of it for an agreed period of time

rent guarantee and legal expenses insurance
an insurance that guarantees to pay the landlord the rent if the tenants should cease paying, plus insurance for the cost of legal fees to recover the property and/or any outstanding rent/costs etc

retention
the process of withholding money from a seller until certain improvements or corrections to the property have been completed to satisfaction.

sealed bid
where interested parties send a letter detailing the amount they are willing to pay for a property (to buy or rent) - the highest bidder usually secures the property.

searches
a request for any information concerning a particular property, usually held by a local authority or the Land Registry.

semi-detached
a property that is joined to another house on one side.

service charge
a charge to cover the cost of repairing and maintaining external or internal communal parts of a building, usually paid by the tenant or leaseholder.

serviced apartments
self-contained apartments designed to provide general amenities for short stays.

solicitor
legal expert who handles all of the documents relating to the purchase or sale of a property.
o solicitors & surveyors

stamp duty
a tax property buyers pay to the government, the value of which depends on the value of the property being bought (ranging between 1% and 4% of the purchase price).

structural survey
a detailed assessment of a property's structure, designed to highlight faults or defects that might impact upon it's value of the property.

studio flat
a flat with one main room, or open-plan living area, that usually incorporates cooking facilities with a separate bathroom.

subject to contract
a term meaning that an agreement for buying a property has been reached, but will not be legally binding until after the exchange of contracts.

standard variable rate (SVR)
the basic interest rate offered by a mortgage lender that may increase or decrease at the lender's discretion.
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tenancy agreement
a contract between a tenant and a landlord that specifies certain rights and obligations for both parties for the duration of the tenancy. Usually an Assured Shorthold Tenancy.

tenant
a person that has a temporary right to possess a property.

tenants contents insurance
insurance to cover the damage or loss of items and belongings within a property.

tenant referencing
a process whereby a landlord investigates the financial history and current situation of a prospective tenant. Landlords and letting offer low cost fast online Tenant Referencing.


tenure
refers to the status of a property, usually in terms of whether it is leasehold or freehold.

title deeds
documents displaying the legal owner of a property.

tracker mortgage
a mortgage that tracks movement in a specific index – either the building society's standard variable rate, LIBOR (the London Inter Bank Overnight Rate – rate at which the bank's lend to each other) or the Bank of England Base rate. It is usually best to have one which tracks the Base Rate because if it goes down the building socity HAS to reduce your rate.

transfer deed
a document from the Land Registry highlighting the transfers in legal ownership of a property from a seller to a buyer.


under offer
a term indicating the status of a property after an offer from a buyer has been accepted, but before contracts have been exchanged.

valuation
the process of understanding a property's value, usually conducted by either a surveyor or an estate agent.

vendor
the technical name for someone selling a property.

void period
the period in which a property lies empty in between periods of tenant occupation.
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yield
income generated from a property relative to the value of the property.