The Ultimate Property Glossary

Property can be filled with jargon, making it difficult to understand what words or acronyms mean.

Take a look at our property glossary for assistance, whether you’re renting, a landlord, a seller, or a buyer – some of these terms will be useful to you.

APRC: APRC

ARLA: ARLA stands for the Association of Residential Letting Agents. This is a professional body for letting agents in the United Kingdom. All members must meet a number of criteria and be experienced professionals.

AVM: The term AVM stands for Automated Valuation Model. Some lenders will use this to determine the value of your home based on local sales and value trends. It is an instant valuation, and no surveyor will be sent to your home.

Additional Security Fee: Some lenders charge an additional security fee, also known as a mortgage indemnity guarantee or premium, to protect themselves in the event of a borrower default.

Advance: An advance is money given to a borrower by a lender and secured by the property as part of the mortgage debt.

Agents: Estate Agents are also known as Agents. The individuals in charge of selling or renting a property.

Alternative Dispute Resolution Service (ADR): ADR, which stands for Alternative Dispute Resolution Service, settles deposit disputes between tenants and landlords.

Appraisal: A valuation is the same as an appraisal. It is when someone, such as an estate agent, assesses the property in order to assign a value to it.

Arrangement Fee: An arrangement fee is a fee levied by some lenders to cover the administrative costs of arranging a loan.

Arrears: Overdue rent or mortgage payments are referred to as arrears. This can frequently result in a tenant being evicted from the property, or, in the case of a home owner, the property being repossessed.

Asking Price: The asking price of a property is the initial price set by the seller. This is the amount they anticipate making from the sale.

Assured Tenancy: In England and Wales, one type of tenancy is an assured tenancy. It provides the tenant with some security because they cannot be evicted without cause. Many people who have assured tenancies stay in their homes for the rest of their lives, and in some cases, the tenant has the option to buy the home.

Auction: An auction is a method of sale. The highest bidder will be able to purchase the property.

Base Rate: The Bank of England’s base rate is the core interest rate in the United Kingdom. Mortgage rates can fluctuate in line with the base rate (depending on the type of mortgage). Learn more on base rate in our blog post here.

Borrower: The individual who is required to repay a loan in accordance with its terms.

Building Survey: It is an in-depth report on the build/construction of the property that also lists any defects. It is also known as a structural survey. A Chartered Surveyor conducts an inspection to shape the survey.

Buildings Insurance: Buildings insurance is a type of insurance required by most mortgage providers and lenders that covers structural damage to the property.

Buy to Let: Buy to Let is a scheme and type of mortgage aimed at those who own a property that will be rented out to tenants. It is when a property is purchased with the intention of earning a rental income.

Buyer: The individual/s who are buying a property.

Capital: The amount left on a mortgage from which interest is calculated is known as capital.

Capped Rate: A capped rate is an interest rate with a maximum limit on the loan rate. For a mortgage, this means that your interest rate will not rise above a certain level for a set period of time.

Cashback: A cashback is a sum of money paid by a mortgage lender to a customer. This is frequently used at the beginning of a contract to entice people to borrow from a lender.

Chain: When it comes to house buying, a chain occurs when buyers and sellers are linked together and rely on one another to complete the sale. A chain is formed when one person sells their home to someone, and another person needs to buy that person’s home.

Charge: A charge is a security interest in property that lenders use when granting a mortgage.

Completion: When a property transaction is legally completed. The point at which a property is legally transferred from one party to another is referred to as completion.

Condition of Sale: Conditions of sale are clauses in a contract that outline the obligations of both the buyer and the seller.

Contents Insurance: Contents insurance is a type of insurance policy that protects possessions within a home against loss or damage. This service is available to both renters and homeowners and is entirely optional.

Contract: A legal document outlining the terms of a transaction between a buyer and seller or a landlord and tenant. Contracts, also known as agreements, must be signed by both parties.

Conveyancer: A conveyancer is someone who is qualified to handle the legal and administrative aspects of transferring property ownership from one person to another. This is usually a solicitor or a certified conveyancer. This person will handle the majority of the sale’s legalities, and both the buyer and seller will have one.

Conveyancing: Conveyancing refers to the legal work and tasks associated with transferring property ownership.

Council Tax: Council tax is a fee that all homeowners must pay (unless exempt). Council tax amounts vary by area and help councils pay for services such as road maintenance and street cleaning.

Covenants: Covenants are rules that govern a property, land, or tenancy agreement.

Declaration of Trust: A Declaration of Trust is a legal document that binds joint property owners in terms of the division of proceeds when the house is sold.

Deed: Deeds, also known as Title Deeds, are legal documents that prove property ownership.

Deposit: A deposit, also known as a down payment, is a sum of money paid by the buyer to the seller upon contract exchange. This secures the property.

Development: A development can refer to a new-build property or one that has recently been refurbished.

Disbursements: Disbursements are third-party costs associated with transactions that are paid by a solicitor to cover items. Stamp Duty, Land Registry, and Local Authorities are examples of such items.

Discharge: A discharge is the termination of a mortgage obligation when no further payments are required.

Down Payment: A down payment, also known as a deposit, is money paid by the buyer to the seller upon the exchange of contracts to secure a property.

Draft Contract: A draft contract is an early version of a contract that is available for review by both buyers and sellers. Acting solicitors edit the draft contract after it has been agreed and signed.

Early Redemption Charges: Early Redemption Charges are a penalty imposed by the lender if a borrower cancels their mortgage early.

Early Repayment Charges (ERC’s): An Early Repayment Charge is a charge from the mortgage lender if a customer pays off the mortgage/loan in full or in part before a specified date in the contract.

Easement: A property easement grants a third party the right to use your property for a specific purpose.

Employment Status: Employment status refers to whether or not people are currently employed and whether or not they work part-time or full-time. This is necessary for mortgage and rent applications because it aids in affordability checks.

Endowment Mortgage: A Endowment Mortgage is structured so that monthly payments go into an endowment (life assurance) policy. At the end of the term, this is used to pay off the loan.

Energy Performance Certificate (EPC): An Energy Performance Certificate (EPC) assigns an energy performance rating to a property.

Engrossment: An engrossment is the final copy of a document prepared by a solicitor for the parties to sing.

Equity: Equity is a homeowner’s financial interest in a property, calculated as the difference between the market value and the mortgage balance.

Estate: An estate is a deceased person’s property and possessions.

Estate Agent: An estate agent is a real estate professional who sells and rents properties. They usually charge a fee for both of these things.

Excess: Excess is a fixed sum that an insured party must pay on any insurance claim.

Exchange of Contracts: When contracts are exchanged, it means that both signed contracts confirming the intention to transfer ownership are physically exchanged, and the parties are legally bound.

First Time Buyer: First-time buyers are those who have never purchased a home before. More on first-time buyer mistakes can be found in our blog post here.

Fixed Rate Mortgage: A fixed rate mortgage is one that locks in your interest rate at a specific level for a set period of time.

Fixed Tenancy: A Fixed Tenancy lasts for the length of time specified in the rental agreement. This is usually six months or a year.

Flexible Mortgage: A Flexible Mortgage allows borrowers to make overpayments while also giving them the option to reduce or skip payments. These features are not available in all flexible mortgages.

Freehold: Freehold refers to “absolute” ownership of property and the land it sits on in indefinitely.

Full Structural Survey: A Full Structural Survey is a detailed report on the construction and any property defects discovered during a thorough inspection.

Gazumping: Gazumping occurs when a seller accepts a higher offer from another party after agreeing to an offer in principle on a property.

Gazundering: Gazundering occurs when a buyer has an accepted offer but then reduces the offer immediately prior to contract exchange.

Graduate Mortgage: In some cases, lenders may be able to provide a specialised graduate mortgage product. Many of these products require no deposit and can lend up to 100% of the property’s value.

Gross: The term “gross” refers to the amount before taxes or deductions.

Ground Rent: Ground rent is an annual fee paid by the leaseholder to the freeholder in order to occupy the land on which a property is built.

Guaranteed Possession: Guaranteed Possession refers to an Assured Shorthold Tenancy, which means that the landlord can repossess the property under the Housing Act 1988 after an initial agreed period, usually six months.

Guarantor: A guarantor is someone who guarantees to pay the tenant’s rent or mortgage payments if the tenant fails to do so. As a guarantor, they accept legal and financial responsibility for any property damage.

Guide Price: The guide price is the price at which a property is expected to sell.

HMO: HMO stands for House in Multiple Occupation. This could be a house share, a house with seperate bed sits or a hostel not used for holidays.

HSE: HSE, which is the Health and Safety Executive, is a goverment organisation that aims to protect people. This can be protection against risks to health and safety – and there are often regulations that apply to residential properties.

Higher Lending Charge: A higher lending charge refers to a fee that lenders can apply when borrowing over a certain percentage of a property value.

Home Condition Report: A condition report is one of the most basic levels of surveys you can get when purchasing a home. Often described as a surface level condition, this is likely used for newer houses that are unlikely to have any issues.

Home Information Pack: A home information pack, also known as HIP and seller’s park, is a document that “was to be provided before a property in England and Wales could be put on the open market for sale with vacant posession.”

Home and Contents Insurance: Home and contents insurance are two different types of insurance you can have for your home. Home insurance, also known as buildings insurance, is protection against the structure of your home. Contents insurance is protection against your personal items.

Homebuyer’s Report: A home buyer’s report is a report that is created to give an overall opinion on a property. This is regarding its condition, valuation and more. The report will go into detail about various areas of the property.

House Price Index: The house price index, also known as HPI, shows and captures changes in the value of residential properties.

Housing Health and Safety Rating System: Housing health and safety rating system, often abbreviated as HHSRS, is a procedure for assessing health and safety risks in residential properties in England and Wales.

Impaired Credit: Impaired credit refers to a borrower’s credit history and score that have been negatively affected by late payments, defaults, collections, judgments, bankruptcy, or other financial difficulties.

Income: Income refers to the money received by an individual or household from employment, investments, and other sources.

Independent Financial Advisor (IFA): An Independent Financial Advisor (IFA) is a professional who provides financial advice and guidance to individuals and businesses. They are not tied to any specific financial institution or product, which allows them to offer impartial and unbiased recommendations to their clients.

Independent Mortgage Advice: Independent mortgage advice is professional guidance provided by an impartial and unbiased financial advisor. The advisor evaluates the individual’s financial situation and goals, assesses their mortgage options, and provides advice on the best mortgage product for their needs. Independent mortgage advisors are not tied to any specific mortgage lender or product, and they have access to the entire market, allowing them to provide clients with a comprehensive range of options.

Individual Savings Account (ISA): An Individual Savings Account (ISA) is a tax-free savings account available to residents of the UK. The main advantage of an ISA is that any interest earned on the money saved within the account is not subject to income tax.

Insurance: Insurance is something people get when moving house. It can be either buildings insurance, contents insurance, or life insurance – often people get all of them.

Interest Charge: An interest charge is a fee that is added to a debt for the use of borrowed money. It is usually expressed as a percentage of the outstanding balance and is calculated on a periodic basis, such as daily, monthly, or annually. Interest charges are a key component of most loan agreements, including credit cards, mortgages, and personal loans.

Interest Only Mortgage: An Interest Only Mortgage is a type of home loan in which the borrower pays only the interest on the loan for a set period of time. The borrower does not pay down the principal amount of the loan during this time, and at the end of the interest only period, they must either pay off the remaining balance in full or refinance the loan.