Buying and Selling Jargon: Property market expressions and Words you need to know

As complicated as buying a house is, it is made harder by the constant use of terminology that you may not be familiar with.

We want to make your journey as straight-forward as possible which is why we have a great list of some of the more common phrases and words that get thrown around so you can be ready for anything and know exactly what you’re doing every step of the way.

Agreement in Principle

The agreement in principle is a document a mortgage lender gives you that confirms that you ought to be able to borrow a certain amount. This document can be used to prove to the seller that you can afford the property.

Annual Percentage Rate (APR)

APR is how much interest you will be paying on any money that you have borrowed, taking into account your mortgage, arrangement fees, and other costs. It is particularly helpful when comparing rates to find out which one works best for you.

Bridging loan

While a typical mortgage is paid back over a long period of time e.g. 30 years, a bridging loan is an option for typically short-term solutions. More often than not, it is seen as an option for buying before any longer-term funding has been approved.

Buy-to-let

Buy-to-let refers to a property specifically bought to rent it out.

Buy-to-let mortgage

A buy-to-let mortgage is a loan specifically designed to buy a property with the sole purpose of renting it out as an investment.

Chain

A chain occurs when there are multiple people involved in the buying and selling process, all reliant on each other. Only one party has to fall through for the entire chain to collapse. As such, it can be a deal-breaker for many buyers and sellers due to how precarious it can make the whole situation.

Completion

Completion is when the sale of the property is concluded, the buyer has the legal right to take ownership of the property and receives the keys.

Completion statement

The Completion statement is a document prepared by the seller’s conveyancing solicitor showing all the financial transactions and costs due, to complete the purchase of your property.

Conveyancer

A conveyancer is a solicitor who is qualified and specialises in this property related transactions..

Conveyancing

Conveyancing is the legal act of transferring ownership of property from one party to another.

Covenant

Covenants are rules, contained within the Title Deeds or lease, that the buyer or renter must comply with.

Deeds

Deeds are legal documents that prove the ownership and boundary of property and land.

Deposit (Buying)

When buying a property, the deposit is the amount of money paid by the buyer on exchange of contracts as part payment towards the purchase.

Deposit (Renting)

When renting a property, the deposit is the amount of money paid by the tenant and held by the landlord or agent for security against breach of the tenancy terms or financial loss such as damage to the property.

Disbursements

Disbursements are fees that are paid by your solicitor which are then added to your final bill. Examples of disbursements are the Land Registry Fee, Stamp Duty and Search Fees (see below).

Draft contract

The draft contract is the first version of the contract that may be amended and updated during the sale to include the necessary information as required.

Early repayment charge

The early repayment charge is the fee you have to pay if you want to terminate a mortgage in advance of the term.

Equity

Equity is the difference between the amount of the property you actually own and the mortgage you still owe.

Exchange of contracts

Exchange of contracts is the point in the process of buying and selling a home that occurs when the buyer and seller both sign contracts and copies of them are exchanged. At this point, the sale is legally binding.

Fixtures and fittings (Buying)

The list of items that describes what is included in the sale, what isn’t included, and what is for sale separately.

Fixtures and fittings (Renting)

The list of items that describes what is included and provided in the letting.

Freehold

The freeholder is the person who owns a property and the land it is on.

Gazumping

Gazumping occurs when a sale is agreed to a buyer at a certain price and then the seller accepts a higher offer from another buyer before exchange of contracts with the first buyer.

Gazundering

Gazundering occurs when a buyer decides to lower their offer just before exchange of contracts.

Ground rent

Ground rent is the annual fee which a leaseholder pays to a freeholder.

Interest only mortgage

An interest only mortgage is a loan where only the interest on the loan is paid each month. You will need to have another method in place in order to be able to repay the loan at the end as you only pay off the interest on the debt and not the capital.

Inventory

The inventory is a list of the contents of a rental property carried out at the start of the tenancy. The inventory serves as a record of the state of items as well as the condition the house is in.

Joint mortgage

A joint mortgage is a mortgage where one or more other people are getting a mortgage together.

Land Registry

The Land Registry is the government office responsible for holding records of property ownership.

Land Registry fee

The Land Registry fee is the fee charged by the Land Registry to record the change of ownership of a property.

Leasee

A leasee is a person who leases a property from a lessor.

Leaseholder

Leaseholder is the person who owns a property for a set period of time. This period can sometimes be up to 999 years.

Lessor

A lessor is a person who leases or lets a property to another.

Mortgage deed

The mortgage deed is a legally binding document outlining the legal obligations of the borrower and the rights of the lender.

Mortgage term

Mortgage term is the total length of time over which you are taking the mortgage out for.

Negative equity

Negative equity occurs when the sale value of the property is below the amount remaining on your mortgage.

Repayment mortgage

Repayment mortgage is one of the most common types of mortgages available. Monthly instalments are repaid along with the interest. Providing all monthly instalments are met and paid on time, the entire mortgage will be paid off by the end of the agreed term.

Retention

Retention can occur when part of the purchase money is held back until such time as a certain job has been completed; typically this is related to building work or specific repairs have been made.

Searches

Searches are enquiries made in order to find out crucial information about the local area and the property itself. These can normally consist of searches for utility information like water and drainage etc. but also for things such as planning permission.

Shared ownership

Shared ownership is a scheme where you can buy a share of the property (usually between 25% and 75%) and then rent the part you don’t own at a reduced rate, which is owned by the local housing association. You have the option to buy a bigger share at a later date.

Stamp Duty Land Tax (SDLT)

SDLT is a tax paid to the government once you have purchased the property. There is no set fee for this as it is a percentage of what the value of the property was at the time of purchase.

Standard Variable Rate (SVR)

SVR is the default mortgage interest rate charged by a lender after your initial mortgage deal period ends.

Subject to contract

Subject to contract is the point the process of selling and buying a home that occurs when an offer has been accepted, but contracts are yet to be exchanged. At this point, nothing is yet legally binding on either seller or buyer.

Survey

A Survey is a property inspection carried out by a qualified surveyor to obtain as much information as possible about a property and check the structure for any faults. The surveyor visits the property, assesses it and creates a report. Depending on how much information you want, reports can have different levels of detail.

Tenant

A tenant is a person living in a property owned by someone else and having temporary possession of it under a lease or tenancy agreement.

Under offer

A property becomes under offer when the seller accepts an offer from a buyer. At this point, the sale is not yet legally binding and the exchange of contracts is awaited.

Vendor

Vendor is another name to describe the person selling a property.

This isn’t everything and there will always be elements of confusion along your journey to buying or selling your house but we hope that we can help alleviate some of this confusion. Overall, if there is ever any aspect that you do not understand, you are always welcome to ask as many questions as you want. We even have another blog for that!