All the Property Terms You Need to Know
Navigating the property market can be confusing with all the jargon thrown around. Don’t worry, we’ve got you covered! This glossary breaks down the complex world of property into easy-to-understand terms.
If you are looking for a specific term, please use the first letter of the word to jump to the relevant section:
A
ANNUAL PERCENTAGE RATE OF CHARGE (APRC)
The total rate of interest you’ll pay for a mortgage’s entire duration. APRC considers all the different rates your mortgage will be subject to and serves as an easy way to compare mort- gage deals—lower rates usually mean a better deal.
B
BRIDGING LOAN
A temporary short-term loan which enables a buyer to purchase a property before selling their existing property.
C
CHAIN
Formed when several property sales and purchases are inter-dependent. A chain can become complicated but a good estate agent will be able to help keep it moving.
CONTRACT / TERMS OF BUSINESS
An Agreement enforceable by law.
COMMONHOLD
A system of ownership usually in place in buildings or estates of multiple occupancies (such as a block of flats). Unlike with leasehold, you own the freehold to your particular property (as do the other owners) and all property owners collectively help manage the upkeep of the building/estate.
CONVEYANCER
A lawyer who specialises in the transferring of home-ownership. They are required if you are using a mortgage and will cover every legal aspect of the home purchasing process.
D
DEEDS
Documents that show who owns the title of a property or land, along with any responsibilities on the property, e.g. what you can/cannot alter, rights of way, etc. Deeds are usually held by the mortgage lender until you pay off your mortgage, then they can be held by you or your solicitor.
E
EARLY REPAYMENT CHARGE (ERC)
A charge incurred when you overpay on a mortgage or transfer to a different mortgage product during a specified amount of time (known as the early repayment charge period). The charge covers potential lost interest to your lender. Most mortgages will allow you to overpay up to a certain amount annually without incurring a charge.
ENERGY PERFORMANCE CERTIFICATE (EPC)
Shows the efficiency of a property and gives an indication of how much the energy bills will be. It is displayed as two graphs: the energy efficiency and the environmental impact of the property. Both are graded from A (the best) to G (the worst).
EXCHANGE OF CONTRACTS
The point at which both parties are committed to the property transaction; both the buyer and seller can walk away at any point before the contracts have been ‘exchanged’.
EX-GRATIA
As a favour or out of kindness, an Ex-Gratia payment is made outside any legal obligation, without admitting liability.
F
FIRST TIME BUYER
An individual who has never bought or owned a property before. Renting a property does not count as buying or owning.
FIXTURES & FITTINGS
A Fitting is something of a chattels nature which is not fixed to the property. A Fixture is something not of a chattels nature which is fixed to the property.
G
GAZUMPING
When a higher offer is made by another party and accepted, even after the offer with the first buyer had been accepted.
I
INDEMNITY
Protection against loss
L
LAND AND BUILDING TRANSACTION TAX (LBTT) (SCOTLAND)
The tax you pay when purchasing land or property in Scotland. The current threshold is £145,000 for residential properties and £150,000 for non-residential land and properties. However, the rate payable is subject to the total purchase cost. See our guide to find out more.
LAND TRANSACTION TAX (LTT) (WALES)
LTT replaced Stamp Duty in Wales from April 2018. Buyers looking to purchase in Wales will be charged LTT on any residential purchase above £180,000 and above £150,000 for non- residential purchases. However, the price you pay varies depending on the overall cost of the property. See our guide to find out more.
LOAN-TO-VALUE (LVT)
The ratio of how much your loan (usually a mortgage) will cover the price of your property, written as a percentage. For example, a mortgage that offers 60 per cent LTV will cover 60 per cent of the property’s price.
M
MORTGAGEE
The person or organisation who lends money to a person or persons in order for them to purchase a property.
N
NEGLIGENCE
Negligence is the performing of an act which a prudent and capable person would not do, or the not performing an act which a prudent and capable person would do.
O
OFFER
A proposition made by one person to another which contains the inference that the person making the proposition is willing to be bound by it.
P
PRS – PROPERTY REDRESS SCHEME
Approved by Government under the Alternative Dispute resolution for consumers to escalate a complaint they have.
S
SNAGGING
Where the developer of new build properties touches up paintwork, adjusts appliances and fixes any other faults within the property. A snagging survey is usually completed prior to the buyer moving in to spot minor cosmetic issues and check the quality of workmanship.
STAMP DUTY
A lump-sum tax that anyone buying a property or land over a certain price in England and Northern Ireland must pay. The current threshold for residential properties is £125,000 and
£150,000 for non-residential land and properties. However, the rate you pay will vary depending on the overall purchase price. See our guide to find out more.
STANDARD VARIABLE RATE (SVR)
The rate your lender charges after your introductory mortgage deal finishes (usually after two to five years). This rate is set by your lender, not by the Bank of England.
SQUATTER
A person currently occupying land for which he has no legal title and for which he is not paying rent.
T
TITLE
The legal right of owning a property or land.
U
UNDER OFFER
If a property is under offer, it means that the seller has accepted an offer from the buyer but the contracts have not yet been exchanged.
V
VENDOR
Another term for the seller.
A
ADDITIONAL LICENSING (ENGLAND AND WALES)
HMO licensing which covers a specific area or whole district of properties that do not require a mandatory HMO licence. This usually occurs when a local authority believes HMOs are not being managed correctly.
ALTERNATIVE PAYMENT ARRANGEMENT (APA)
An arrangement set up by Universal Credit to have a claimant’s money sent in a different way than the standard monthly payment.
ARLA
Association of Residential Lettings Agents.
C
CAPITAL GAINS TAX
Tax landlords pay when selling a property that is not their main home, applicable to any profit made on the increase in the property’s price.
CHECK-OUT
At the end of a letting an independent Check-Out clerk, will take final gas/electricity meter readings and check the Inventory/Schedule of Condition for any missing or damaged or dilapidated items.
CLIENT / LANDLORD
The person for whom we act, who instructs us to let his property, and who contracts to pay our fees for so doing. The Landlord is our client and we have certain legal duties to him. The tenant is not our client and we do not act on his behalf.
CONSENT TO LET
A Landlord is normally required to obtain the consent of his mortgage provider or superior landlord in order to let his property.
COUNTY COURT
A court which hears civil cases of a minor nature.
D
DEPOSIT
The sum of money laid down by the tenant.
E
ENERGY PERFORMANCE CERTIFICATE (EPC)
A document outlining a property’s energy use, typical energy costs and recommendations on how to reduce energy usage and save money. A copy of the EPC must be given to the tenant, failure to provide one will mean a landlord cannot serve a Section 21 to evict a tenant.
EVICTION
When a tenant must leave a property permanently, usually for breaking a term of their tenancy agreement. Evictions commonly occur when tenants do not pay rent or if the landlord needs to regain use of the property.
EX-GRATIA
As a favour or out of kindness, an Ex-Gratia payment is made outside any legal obligation, without admitting liability.
F
FAIR WEAR AND TEAR
The natural deterioration that is reasonably expected to occur to a property’s furniture, fixtures and fittings over time. It takes into account the length of tenancy and number of tenants living in the property. It is not something the tenant is liable for when deductions to a tenant’s deposit are considered at the end of the tenancy.
H
HOUSE IN MULTIPLE OCCUPATION (HMO)
A single property with at least three people who are not from the same family (‘household’) and share certain facilities such as a kitchen.
HOUSING HEALTH AND SAFETY RATING SYSTEM (HHSRS) (ENGLAND AND WALES)
A list of 29 property hazards considered detrimental to a person’s health as set out by the Government. If a property contains one of the hazards, a landlord will be served a notice of varying degree to improve the property or risk prosecution, a fine or being unable to evict a tenant.
I
INCOME TAX
Tax paid by landlords on any profit made from rent or fees. This is in addition to income from other forms of employment.
INSURANCES
Insurances are designed to protect individuals against loss, damage, legal and other costs. It is important that we advise Landlords of the benefits of taking insurance for their Contents, Buildings, Third Party Liability and Legal Costs. Tenants should always Insure their personal contents.
L
LEASE
A contract by which a landlord grants use of a property or part property for exclusive possession for a determined period of time, for a consideration, usually rent.
LETTING AGENT CODE OF PRACTICE (SCOTLAND)
The rules by which letting agents operating in Scotland must follow. This includes how they work with landlords, property management, and communications. This also places a duty on letting agents to inform their landlords where their property legally requires a licence.
M
MINIMUM ENERGY EFFICIENCY STANDARDS (MEES) (ENGLAND AND WALES)
The standard of energy efficiency a property must meet in order to be let, the minimum standard is defined by the energy rating on the property’s Energy Performance Certificate (EPC).
MANAGED PAYMENT TO LANDLORD (MPTL)
A form of Alternative Payment Arrangement (APA) where a claimant on Universal Credit has their rent sent straight to the landlord. This arrangement can be requested by the claimant or the landlord.
O
OFFER
A proposition made by one person to another which contains the inference that the person making the proposition is willing to be bound by it.
P
PENALTY
A form of damages for breach of contract.
PERMITTED PAYMENTS (ENGLAND AND WALES)
The payments which a landlord or letting agent can legally charge to a tenant, as defined under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include rent, tenancy deposit, holding deposit and utilities but do differ slightly between England and Wales.
PROHIBITED PAYMENTS (ENGLAND AND WALES)
Illegal charges under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include cleaning, admin, gardening and referencing fees.
PROPERTY PORTAL
A specialist website which lists properties available to buy or rent from a range of sources. Examples of property portals include Rightmove, OnTheMarket and Zoopla.
Q
QUIET ENJOYMENT
The peaceful, unharrassed occupation of let property to which a tenant is legally entitled from his landlord. It does not apply to barking dogs, screaming kids, noisy aircraft or similar.
R
RENT SMART WALES
The Welsh Government’s licensing scheme for landlords and letting agents. All landlords leasing properties in Wales must be registered and licensed by this scheme.
RE-LET
A property may be re-let when a tenancy terminates at its contractual expiry date, or sometime earlier, and a new tenancy is created.
RESIDENT LANDLORD
A landlord who lives in the property with the tenant or lodger they let to.
RETALIATORY EVICTION
When a landlord evicts a tenant having received a complaint about the property’s condition, or for repairs to be carried out. Landlords who are subject to complaints cannot issue an eviction notice until six months after receiving an Improvement Notice to remedy any reported disrepair.
S
SCHEDULE OF CONDITION
See notes on Inventory
SECTION 21 NOTICE (ENGLAND AND WALES)
The process used to evict a tenant without giving a specified reason. In December 2019, the Government announced the Renters’ Reform Bill which will abolish the use of ‘no fault’ evictions by removing Section 21 of the Housing Act 1988.
SELECTIVE LICENSING
A license landlords must obtain to legally operate in certain local authority areas. Selective Licensing usually occurs in areas of low housing demand, prevalent antisocial behaviour, poor property conditions, an influx of migration, high levels of deprivation or crime. Its aim is to ensure that properties are safe to inhabit and that the landlord is managing the property correctly.
SERVICE CHARGE
The payment made by a tenant, in addition to rent, towards the upkeep of communal expenses in, for example, a block of flats.
SUBLETTING
When a tenant lets part or all of the property they are renting to someone else (a subtenant). Tenants must get permission from their landlord before subletting a property, otherwise legal action can be taken against them.
SQUATTER
A person currently occupying land for which he has no legal title and for which he is not paying rent.
STATUTORY TENANT
A person who continues in the same property after the end of the contracted term of the let, with no new contract being agreed.
SUB LEASE
A letting by a tenant (lessee), to a third party, sub tenant, (sub-lessee) of all or part of a property for a shorter term than his own.
T
TENANCY
The occupation under a Tenancy Agreement or lease of property.
TENANT LIKE MANNER
Tenants need to ensure they are behaving in a tenant-like manner will normally include small jobs such as: Unblocking sinks, toilets, and drains. Changing light bulbs and fuses. Keeping both the interior and exterior clean, including windows. It’s expected that the tenant takes proper care of the property, treating the property as if it’s their own.
TERM
The period for which a property is let by a landlord to a tenant under a Tenancy Agreement.
U
UNIVERSAL CREDIT
A monthly benefit payment that has replaced Child Tax Credits, Housing Benefit, Income Support, Job-seekers Allowance, Employment and Support Allowance and Work Tax Credit.
V
VACANT PROPERTY MANAGEMENT
Looking after a Vacant Property for a weekly charge.