Property Glossary

A

APR
Stands for Annual Percentage Rate, it usually includes the interest rate and other fees associated with the loan tending to make it higher than the Bank of England interest rate. This is sometimes referred to as the true cost of the loan.

B

Base Rate
The interest rate set by the Bank of England.

Bridging Loan
An expensive temporary loan used by one to tide themselves over to purchase a new property before selling there current one.

Buy to let
When someone buys a property as an investment with intent to generate income from the rent.

C

Capital
The amount borrowed to purchase your property.

Conveyance
The legal process of transferring a property from one person to another.

Completion
The last stage in the buying process. Occurs after contracts have been exchanged and the vendor has received the agreed sale price.

Covenant
An agreement contained within a deed or lease that either imposes an obligation either to do or not do something.

D

Deeds
The legal documents relating to a property. It states details such as the registered owner and any other matters since the property was built.

Deposit
The lump sum paid to the vendor on exchange of contracts. It forms part of the total purchase price.

Discounted Rate
An assured reduction in the standard variable mortgage rate (SVR). This often lasts for an agreed time.

E

Endowment
A life assurance plan used to pay of a mortgage at the end of its term in a lump sum.

Equity
The value of a property minus the loan secured on it.

Exchange of contracts
The point in the buying/selling process when it becomes legally binding. If either the vendor or purchaser pulls out, compensation will have to be paid to the other party.

F

Freehold
Ownership of the land on which a property stand indefinitely.

Fixed rate
A mortgage were the rate is fixed for a certain period of time.

Flexible mortgage
A mortgage which allows you to make larger payments than agreed (when you have extra cash) or smaller payments (when cash is short) without incurring any penalties.

G

Ground rent
A rent paid to the owner of a freehold by someone who has bought a lease.

I

IFA
Independent Financial Adviser.

Interest only mortgage
Your payments made to your lender are simply the interest on the loan. No capital is repaid until the end of the term on which the full amount must be returned.

L

Land registry
Land Registry is a Government agency responsible for the registration of title to land.

Leasehold
When you own a property for a defined number of years, after which the property returns to the freeholder.

R

Repayment mortgage
Your payments to your lender are made covering the interest and the capital of the loan. At the end of the mortgage term the property is completely yours.

ROI Return on investment.

RSL Registered Social Landlord.

S

Secured Loan
A loan secured on your property. If you cannot keep payments the lender can repossess your property to recover the capital lent.

Sitting tenant
A tenancy when the occupant has a right to live in the property even if sold to someone else.

Stamp duty
A property tax paid to the government when buying a property. Can vary and there are exemptions.

Survey
An in depth structural analysis of a property you wish to purchase.

SVR
Standard Variable Rate. Is when the lenders rate can go up or down effecting your payment accordingly.

Search
Checks carried out during the conveyance. These checks are made with local authorities and other official organizations to check planning proposals and other matters that may affect the value of the property, and if it can be sold in the future. The HM Land Registry is also searched to establish that there are no unknown charges registered against the property.

T

Term
The duration of the mortgage (normally 25 years).

V

Valuation
A basic survey of a property to establish how much it is worth.

Vendor
Another name for the seller of the property.