Glossary Of Terms

A | B | C | D | E | F | G | H | I | J | K | L | M
N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Advance
Mortgage Loan

APR
The total cost of a loan- including all costs, interest charges and arrangement fees- shown as a percentage rate and easily comparable with mortgage interest rates.

Arrangement Fee
The fees charged for arranging a loan on certain products.

B

Building Insurance
Insurance against the cost of repair or rebuilding a property from scratch following structural damage, for example by flood, fire or storm.

C

Chain
A number of linked property sales where exchange of contracts must take place simultaneously.

Completion
The date when the purchaser and vendor complete the sale of land or property. The purchaser pays the balance of the purchase price and the vendor gives possession to the purchaser.

Charge
A mortgage deed which lenders (building societies, banks etc) require borrowers to sign. It is registered against the property until the loan is repaid and the charge is removed.

Contents Insurance
Insurance covering any loss of or damage to your possessions within the property.

Covenant
A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.

Contract
A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale.

D

Deed
The legal documents relating to property. These will include all matters which relate to the property since it was built.
Disbursements The fees paid by your solicitor, such as Stamp Duty, Land Registry and search fees on top of conveyancing, or when selling a property Office Copy Entries.

Draft Contract
Unconfirmed version of the Contract.

E

Equity
The difference between the value of a property and the amount of mortgage owed.

Exchange of Contracts
The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at an agreed price.

F

Freehold
Ownership of the property and land upon which the property is situated.

Fixtures & Fitting
All non structural items included in the purchase of a property ie carpets, curtains and blinds.

G

Ground Rent
The annual charge levied by the freeholder to the leaseholder.

H

Home Buyers Report
The homebuyers report comments on the structural condition of most parts of the property that are readily accessible, but does not involve in-depth investigation or the testing of water, drainage or heating systems.

Housing Association
A non-profit making body which lets you buy a percentage of the property and pay rent on the rest.

I

Instruction
When a seller instructs an estate agent to market a property.

L

Land Registry
The Land Registry is a Government agency responsible for the registration of title to land. Registration enables the sale of land and property to take place without the laborious and expensive exercise of checking through Title Deeds.

Local Search
A questionnaire sent to a local Authority by a purchaser’s solicitor to verify whether a property is affected by planning proposals, tree preservation orders etc.

Leasehold
To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord. A leasehold is normally offered for either 999 years, 125 years, 99 years or shorter terms.

M

Mortgage Offer
A formal offer of mortgage issued by a building society, bank or other lender once the usual formalities such as references and valuation have been carried out.

Maintenance Charge
A charge made towards the upkeep of a leasehold property primarily flats and apartments.

Mortgage Indemnity Guarantee(MIG)
An insurance policy that mortgage lenders may require buyers to pay for if there loan is above a specified amount of the purchase price.

N

Negative Equity
Occurs when the value of a property falls to less than the Outstanding mortgage

NHBC Warranty
A type of building guarantee available on some newly-built homes under which defects occurring within a specified time, post construction, are remedied.

O

Offer
A bid made by a prospective buyer, this is not legally binding.

Office Copy Entries
A Land Registry term for copies of registers and plans, they are officially marked ‘Office Copy’ and are legally recognised.

P

Pre Contract Enquiries
These are enquiries made by the purchaser’s solicitor to the vendor’s solicitor requiring information relating to the property being purchased prior to the exchange of contracts.

R

Retention
Holding back part of a mortgage loan until essential repairs to the property are satisfactorily completed.

S

Stamp Duty
A government tax on the sale of land and property which is related to the sale price. At the present time the tax is 1% from £120000 to 250000, 3% from £250000 to £500000 and 4% over £500000. Some property is exempt from Stamp Duty.

Subject To Contract
When an offer is made to purchase a property ‘subject to contract’ it means that all the dealings are subject to the actual exchange of the contract itself. Nothing is binding on either the vendor or purchaser until the contracts are exchanged.

Survey
An inspection made by a qualified surveyor. There are three main types of survey. Valuation report(for mortgage purposes), Homebuyers report(also comments on general condition) and Full Structural survey(examines every structural detail).

T

Tenure
A collective term relating to the nature of the vendor’s title to a Property ie freehold and leasehold.

Title Deeds
The ultimate record of ownership of a property, the evidence
of which is found in the Title Deeds.

Transfer Deeds
The Land Registry document that transfers legal ownership
From seller to buyer.

U

Under Offer
The status of a property, when a seller has accepted an offer
from a purchaser prior to exchange of contracts.

V

Vendor
The person who sells property or land.

Y

Yield
The income from a property calculated as a percentage of its value.