Sales jargon buster
Our A-Z of property related jargon is designed to help you familiarise yourself with property terminology you might come across during the residential selling or buying process.
Annual percentage rate (APR)
The APR is a compound interest rate figure used to compare different mortgages. Defined by law, it includes repayments on the loan plus any mortgage related fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing over the entire term and should appear on all mortgage illustrations.
Appraised value
The appraised value is the value of a property, as estimated by a surveyor.
Appreciation
The increase in the value of a property as a result of changes in market conditions.
Arrangement fees
Fees charged to arrange a loan on certain products. Usually applied to loans where a special interest rate applies e.g. fixed or capped rates.
Asset
Any form of property owned by a person, including currency, stocks and enforceable claims against others.
Asset Valuation
An asset valuation is an assessment of the value of your assets.
Association of Residential Letting Agents (ARLA)
The Frost Partnership is an ARLA licensed letting agent. ARLA is the only professional body that is solely concerned with the regulation of Letting Agents, and for 25 years has been actively promoting the highest standards across every aspect of residential letting and management. ARLA member firms are required to work within the codes of practice, which covers the key stages of Letting and Management of property.
Auction
A means of selling a property whereby it is listed at an auction. If the property does not reach the reserve price then it is not sold. If it does reach the reserve then the auctioneer's hammer falls that represents an exchange of contracts and the successful bidder is legally obliged to pay a 10% deposit and sign a memorandum of sale before leaving the auction. Structural surveys and searches would have to be made in advance by a bidder.
Authorised guarantee agreement (AGA)
AGA is a common requirement on granting a lease. The outgoing tenant gives an AGA to the landlord if it assigns the lease, guaranteeing that the incoming tenant or assignee will pay the rent and observe the covenants specified under the lease.
Break clause
A clause in a lease giving either or both parties the right to terminate a lease in specified circumstances
Bridging loan
A short-term loan commonly used to cover or 'bridge' the overlap between the purchase of a new property and the sale of an old one.
Broker's fee
Fee charged by a broker for locating the most appropriate mortgage.
Building survey (full structural survey)
A full inspection of the property, conducted by a chartered surveyor, who will write a detailed report setting out the soundness of a property and any property defects. Suitable for any house, particularly older properties and those that have been poorly maintained as well as properties that have been extensively altered or extended, or any property due to be altered or extended.
Buildings insurance
An insurance policy that pays the cost of repair or rebuilding in the event your property is damaged or destroyed. Most mortgage lenders will require buildings insurance to be taken out as a condition of their loan.
Buy-to-let mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out.
Capital
The amount of money either put into buying a property or the deposit placed on a property. Also known as equity.
Capped-rate mortgage
A capped-rate mortgage sets a maximum rate of interest that the lender can charge, but only for a specified period.
Cesspits
If you live in the country in the UK you may not have access to public sewers so a cesspit captures sewerage from the property. Cesspits are typically emptied on a monthly basis.
Chain
Chain refers to a situation that occurs when a buyer is reliant upon completion of the sale of their existing property in order to complete on the purchase of the new property.
Chartered surveyor
A surveyor is someone employed to carry out a building survey to check for any problems with the property you are looking to buy. If a surveyor is “chartered” it simply means he/she is suitably qualified and a member of the Royal Institution of Chartered Surveyors (RICS).
Client money protection (CMP)
CMP is an insurance scheme that covers any money handled by your letting agent, whether you are a landlord, tenant or other client. Provided by professional bodies such as ARLA.
Commission
The commission is the estate agent's fee for completing the transaction on a sale or let property.
Common areas
Common areas are areas of land or buildings, such as gardens, hallways, recreational facilities and parking areas, where more than one resident shares access.
Comparative search
A comparative search looks at the actual sale values of similar properties in the same area as your property. This search is normally carried out by a surveyor and should give an indicative sale price for a property.
Completion date
The completion date is the day on which money is transferred from the buyer's to the seller's solicitor. It is the date that the buyer becomes the legal owner of the new property.
Conditions of sale
The conditions of sale are the details that determine the rights and duties of the seller and buyer. These may be national, statutory or the Law Society's conditions.
Contents insurance
This is insurance which a tenant should consider to protect their belongings such as furniture, jewellery, pictures and items of value against fire, damage and theft. You should ask for it to include cover to re-house you in the event of fire or flood damage rendering the let property uninhabitable.
Contract
A contract is a legal agreement between the seller and buyer of a property, which binds both parties to complete the transaction.
Conveyancer
A conveyancer is a qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.
Conveyancing
Conveyancing is the legal process transferring ownership from vendor to purchaser.
Council of mortgage lenders (CML)
The Council of Mortgage Lenders devised the Mortgage Code to ensure lenders treat customers fairly.
Council tax
Tax charged to the person living in the property such as the tenant (or property owner if the property is empty). It is a contribution to local services such as police, waste collection and the fire service. The council tax varies depending on the property’s value and is set annually by the individual Local Authority and paid monthly.
Covenant
The covenants are rules and regulations governing the property, contained in its Title Deeds or Lease.
Credit check
The procedure by which a check is made on the credit history of an applicant, usually conducted by one of the large dedicated credit rating agencies. The check will reveal history of credit card repayments, outstanding debts, arrears etc.
Credit history
A history of an individual's open and fully repaid debts. By checking a credit history it helps a lender to assess the likelihood that a prospective borrower will maintain their mortgage repayments.
Deeds
Deeds are legal documents proving ownership, generally held by the mortgage lender.
Deeds release or discharge fee
The fee charged by lenders at the end of a mortgage term to cover the administrative costs of transferring the property ownership documents to the borrower.
Deposit
A sum of money paid by the buyer on exchange of contracts.
Depreciation
Depreciation is the decline or reduction in the value of a property caused by changes in market conditions (the opposite of appreciation).
Detached
Term used to describe a property that stands alone and is separated from all others.
Development
A newly built residence or an older property that has been refurbished and modernised.
Dilapidations
This term principally covers proceedings whereby a landlord, by service of a ‘schedule of dilapidations’ seeks either to enforce a tenant’s repairing obligations under a lease of business premises, or claims compensation for lack of repair by the tenant at the end of the lease term.
Disbursements Fees
Disbursement fees are paid by the buyer's solicitor on the buyer's behalf - such as stamp duty, land registry and search fees.
Down valuation
When the lender restricts the amount you can borrow after the surveyor's valuation report indicates the property is not worth the sum sought.
Draft contract
A draft contract is a preliminary version of the contract.
Early repayment charge (ERC)
A charge levied by the lender as a penalty if a mortgage is paid off within a specified period.
Endowment mortgage
Interest-only repayments combined with monthly premiums into an endowment policy designed to pay off the loan at the end of the term.
Energy Performance Certificate (EPC)
A legally required assessment of how energy efficient a residential property is. It is valid for 10 years and is required for all properties that are advertised for sale or rent unless the property is a listed building. An EPC measures the energy efficiency of a property using a scale of A-G.
Exchange of contracts
The point at which signed contracts are physically exchanged, legally binding the seller and buyer to the sale and purchase of a property at the agreed price.
Financial services authority (FSA)
An independent body that regulates the financial services industry in the UK.
Fixed rate mortgage
A fixed mortgage is one in which the interest rate is set for an agreed period of time.
Fixtures and fittings
All non-structural items included in the purchase of a property.
Flexible mortgage
A flexible mortgage is an arrangement whereby you can increase or decrease your mortgage.
Freehold
Where the owner of the property also owns the land on which it is built.
Gazumping
When a seller accepts a higher offer from a third party on a property that they have already agreed to sell to someone else prior to exchange of contracts.
GIA (gross internal area)
The GIA refers to the total area within the perimeter walls of a property and makes no allowance for the space occupied by staircases, walls, WCs etc. This measurement is the standard measurement given for industrial property.
Ground rent
Applies to Leasehold properties and is a sum paid annually to the Freeholder by the Leaseholder
Guarantor
A guarantor is someone who promises to pay the borrower's debt if the borrower defaults.
Higher lending charge
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.
Homebuyer's survey and valuation
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.
Household insurance
An insurance policy that protects against loss or damage to the property caused by fire, some natural causes and acts of vandalism.
Houses in multiple occupancy (HMO)
A building of three floors or more which is to be occupied by three or more people and where these people live as more than one household and share facilities such as bathrooms, toilets or cooking facilities.
Inflation
Inflation is the general rise in prices over time.
Interest charges
Interest charges are the charges that banks make on a loan, calculated as a percentage of the amount borrowed.
Interest-only mortgage
An interest-only mortgage is a type of mortgage in which the borrower only repays the interest on the loan for the duration of its term and repays the full loan amount at the end of the mortgage period.
Internal repairing (IR) lease
Under this type of lease the landlord retains responsibility for structural and external repairs without reimbursement. The tenant's only responsibility is for repairing the inside of the let premises and contributing towards the maintenance of any common parts via a traditional service charge.
Joint income
Joint income is the total gross income of the two borrowers in a joint mortgage.
Joint tenants
A form of ownership for two parties whereby if one of them dies, their share of the property will automatically transfer to the remaining party, giving them full ownership (regardless of the terms of the deceased owner's will).
Land registration
The process of registering the legal title of an area of land with the Land Registry, typically handled by a solicitor.
Lease
A contractually binding agreement that grants a right to exclusive possession or use of property, usually in return for a periodic payment called rent.
Leasehold
Leasehold is a type of ownership in which a person owns a property, but not the land on which it is built. The owner of the Freehold will grant a lease on the property for a specified length of time.
Legal charge
Legal charge is a mortgage on the property.
Lender
The party, typically a bank, building society or mortgage company offering the loan.
Listed building
A building officially listed as being of special architectural or historic interest, which cannot be demolished or altered without prior local government approval.
Loan to value (LTV)
Loan to value is the proportion of the value of the property on which the lender is prepared to loan.
Local authority search
Procedure whereby a buyer's solicitor checks with the local council regarding any outstanding enforcement or future development issues that might affect the property or immediate area.
Loan security valuations
Loan security valuations are arranged when you need to borrow money. Instruct a chartered surveyor to carry out a loan security valuation of your property to provide the valuation to your bank.
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.
Maisonette
A maisonette is a self-contained apartment (usually on two floors) in a larger house with its own entrance from the outside.
Mezzanine floor
Mezzanine floor is an intermediate floor that can be installed post construction, height permitting, to provide additional storage / space.
Mortgage
A mortgage is an amount of money advanced by a lender such as a bank or building society on the security of a property and repayable over a long period of time.
Mortgage payment protection (MPP)
This is an insurance designed to pay your monthly mortgage for a limited period, usually a year if you are unable to work through illness, disability or redundancy.
Mortgage broker
Someone who advises buyers on the types of loans available and helps to process any subsequent application.
Mortgage deed
The mortgage deed is a legal document that confers ownership or title to a property.
Mortgage rate
The standard variable interest rate quoted by all mortgage lenders, it normally varies in line with the Bank of England base rate. All discounted rates are based on this mortgage rate.
Mortgage term
The mortgage term is the period of time over which a mortgage loan must be repaid.
National Association of Estate Agents (NAEA)
NAEA is the UK's leading professional body for estate agency. Its international members are bound by strict rules of conduct to ensure they offer you the highest level of integrity and service, while the association's entry qualification means you can be sure you are dealing with an professional property agency. The Frost Partnership is a member.
National House-Building Council (NHBC scheme)
A type of building guarantee available on some newly built homes under which defects occurring within a specified time after construction are remedied.
Negative equity
A situation in which the value of a property has fallen to below the level of the loan secured on it.
NIA (net internal area)
The NIA is defined as the usable space within the perimeter walls of a property. It excludes areas such as the WCs, space occupied by solid dividing walls, staircases etc. NIA is the standard figured quoted for office space.
Offer
A sum of money that the buyer offers to pay for a property.
Offer of a loan
A formal document approving the mortgage you have requested and detailing the Terms and Conditions that will apply.
Open market value
The price a property should achieve where there is a willing buyer and willing seller.
Penalties
A specified charge that is levied by the lender under certain circumstances, usually for full or part repayment within a specific period linked to a discount, tracker, fixed or other product type.
Pied à terre
A property kept for temporary, secondary or occasional occupation.
Preliminary enquiries
The initial enquiries about a property put forward to a seller, which the seller must answer before the exchange of contracts.
Property Alerts
Automatic email property alert service provided by The Frost Partnership, highlighting properties you might be interested in.
Public liability insurance
Insurance that covers injury or death to anyone on or around a property.
Purchaser
A purchaser is a person who is buying a property.
Re-mortgage
Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to take advantage of any equity gained by a rise in value.
Rent guarantee
Rent guarantee is an insurance that landlords take out to protect from loss of rent or fees involved with evicting non-paying tenants.
Repossession
When the mortgage lender takes possession of a property due to non-payment of the mortgage.
Royal Institution of Chartered Surveyors (RICS)
RICS is one of the most respected organisations for professionals involved in land, property, construction and associated environmental issues. With around 100,000 qualified members in some 140 countries, RICS is one of the most respected organisations and globally recognised. Our Surveyors are members of the Royal Institution of Chartered Surveyors, qualified to carry out surveys and valuations on commercial and residential properties throughout the UK and certified to carry out the popular RICS approved Homebuyers reports and valuations.
Search
A request or enquiry for information concerning the property held by a local authority or by the Land Registry
Semi-detached
A property that is joined to one other house.
Service charge
Service charges are paid by the owner and cover the cost of providing various services (i.e. maintenance and repair of the building and common parts, provision of heating, lighting and security).
Share of freehold
Where the freehold on which the property stands is owned by a limited company and the shareholders of that limited company are the owners of the property.
Sitting Tenant (Tenant in situ)
A sitting tenant occupies the property as a tenant, and has legal rights without a lease. Any sale would be subject to any rights of a tenant who has occupation. A property with a sitting tenant can often have a much reduced asking price.
Sole agent
When a seller chooses only one estate agent to sell their property.
Sole occupancy
Sole occupancy is a property that is occupied (lived in) only by the mortgage applicant(s) and their direct family.
Solicitor
A solicitor is a legal expert handling all documentation for the sale or purchase of a property.
Stamp duty
A government tax paid by the buyer of a property, which ranges between 0% and 5% depending on the value of the property.
Structural survey
This is based on a detailed inspection of the property and reports on the general structural condition.
Studio flat
A studio flat consists of one main room or open-plan living area incorporating cooking and sleeping facilities and a separate bathroom/shower room.
Subject to contract
Legal terminology that indicates an agreement is not yet legally binding and depends upon the terms yet to be agreed within the contract.
Subletting
Where the tenant lets part or all of the premises to a subtenant, as permitted by the terms of the lease. It differs from assignment in that the head lessee remains responsible to the landlord for the payment of rent and fulfillment of other obligations.
Surveyor
A professional person qualified to estimate the value and condition of land and property.
Tenancy agreement
This is the legal document that agrees the terms and conditions of letting a property between a landlord and tenant. The agreement explains the rent to be paid, the date it should be paid, the rights and responsibilities of a landlord and tenant and under what circumstances the agreement can be terminated.
Tenants in common
A form of ownership by two or more people in which if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other(s).
Tenure
Tenures are conditions on which a property is held i.e. length of lease.
Terraced house
A property that forms part of a connected row of houses separated only by shared dividing walls.
Title deeds
Title deeds are documents showing the legal ownership of a property.
Title insurance
An insurance policy which a buyer can take out to allow a sale to complete where there is a potential problem with the documentation in proving legal ownership of some part of the land they are buying.
Title search
An investigation carried out by a conveyancer or solicitor into the history of ownership of a property. The search will check for liens, unpaid claims, restrictions or any other problems that may affect ownership.
Tracker mortgage
A type of mortgage whereby any changes in the rate of interest charged follow exactly ('track') another, specified, interest rate or index. Typically a tracker mortgage will track the Bank of England base rate.
Transfer deeds
The Land Registry document that transfers legal ownership from seller to buyer.
Under offer
If a property is under offer, the seller has accepted an offer from a buyer but not yet exchanged contracts.
Valuation
A valuation is a basic survey of a property to estimate its value for mortgage purposes. Mortgage lenders will insist on this before lending.
Valuations for litigation or matrimonial proceedings
Property valuers undertake valuations in connection with matrimonial proceedings.
Value
The price of a property under normal conditions, i.e. when the buyer is not forced to buy and the seller not forced to sell.
Variable base rate
The basic rate of interest charged on a mortgage. This may change in reaction to market conditions so monthly payments can go up or down.
Vendor
The vendor is the person selling a property.
Victorian period property
A property built between approximately 1837 -1901.
Writ of summons
A writ of summons is a document instituting legal proceedings.
Yield
Yield is income from a property calculated as a percentage of its value.
