- Absent landlord
A landlord described as ‘absent’ is one who cannot be contacted. If the lessees want to form an RTM company but are unable to contact the landlord, they can make a legal application acquire the right to manage.
The guarantee of title to ownership.
A summary of current and previous title documentation to a piece of land.
- Abstract of title
A legal document prepared by the vendor’s solicitor relating to land not registered with Land Registry, proving the vendor owns the land and any previous mortgages have been discharged.
- Abstract title
A list of all documents that prove title to land.
The document you need to sign when accepting a lender’s mortgage offer.
- Acquisition date
The date the RTM company took over legal responsibility for the running of the property.
- Additional enquiries
Additional questions raised by the buyer's conveyancer, often as a result of queries from the purchaser or matters revealed in the buying and selling process.
- Administration fee
A payment to cover the costs of processing a property rental application. This is paid by the tenant and will be taken from the initial monies once the tenancy starts.
Person or company acting on behalf of the landlord. Responsibilities can include letting, rent collection and/or management of the property.
- Agreement fee
A payment to cover the costs of drawing up a tenancy agreement. This is usually shared between the landlord and tenant.
- Air brick
A perforated brick used for ventilation, usually under timber floors and in roof spaces.
The reduction of a borrower’s liability against a received loan, usually through an agreed schedule of regular payments e.g. a mortgage.
Repayment of a loan by instalments with regular payments to cover the principal and interest.
- Amortization term
This refers to the amount of time required to amortize a loan. The amortization term is expressed as a number of months. For example, for a 30 year fixed rate mortgage, the amortization term is 360 months.
- Annual Equivalent Rate (AER)
A notional interest rate that is designed to make comparisons easier for consumers. It shows the total earned interest savings, assuming that your cumulative interest returns were compounded for the duration of your investment.
- Annual Percentage Rate (APR)
The total cost of a loan, taking into account interest charges, arrangement fees and other costs, shown as a percentage.
- Annuity mortgage
This type of mortgage includes repayments of both capital and interest in the monthly instalments.
This is how the services charges for the whole of the building are divided between all the lessees. Your proportion of the services charges should normally be set out in your lease.
- Architect’s Certificate
This confirms that an architect oversaw the construction of the building. It would be important to have either an architect’s certificate or an NHBC guarantee if you wanted to borrow against your property.
The Association of Residential Lettings Agents.
The Association of Residential Managing Agents.
- Arrangement fees
A fee charged by a mortgage lender or broker to arrange a loan.
Money that is due but remains unpaid by a tenant in whole or in part after the date specified in the tenancy agreement.
A potential serious health hazard. If you suspect your insulation may use this fibrous mineral, seek specialist advice immediately.
Used on floors and flat roofs, this black, tar like substance is waterproof and very sticky.
To transfer the right or interest in a property from one person to another.
The person to whom the right or interest of property is transferred.
The transfer of ownership of an insurance policy or lease.
The person who transfers a right or interest of property to another person.
- Assured shorthold tenancy (AST)
A commonly used rental agreement where the property will be the tenants main and principal home, the tenant is an individual, the landlord does not live in the building (residential landlord) and net rent does not exceed £100,000 a year. It covers a fixed period, so both parties know the date the property will be vacated.
- Balanced flue
A pipe or tube fitted to a gas appliance that lets the fumes escape.
- Banker’s draft
A cheque drawn directly from a bank’s funds, and not from an individual’s account.
- Base rate
The rate of interest that the Bank of England charges for lending to other banks. These banks then use it as a benchmark for the interest rates they charge when lending money to consumers, often stipulating an interest rate ‘X% above the base rate’.
- Basic variable rate
The standard rate of interest charged by a mortgage lender, which may increase or decrease, usually as a result of movements in the Bank of England base rate.
A BTL mortgage is used to purchase a property for letting. Depending on circumstance, you will be classified as a Business BTL customer or Consumer BTL customer in line with the Mortgage Credit Directive. Your mortgage broker can provide additional information.
- Beneficial owner
The person or people who are entitled to receive the proceeds of a sale.
- Block management
Refers to agents acting on behalf of freeholders and leaseholds for blocks of apartments and flats. Responsibilities can include organising internal cleaning, garden maintenance, insurance and redecoration.
- Bonding or Bonded
The agent arranges and maintains, usually through a professional body, Client Money Protection Insurance which will reimburse the client in the event of fraudulent or dishonest activity.
- Breach of contract
Where one of the parties bound by a contract fails to keep to the contract’s terms and conditions.
- Break clause
A clause sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term. It may also be referred to as a Release Clause.
- Breeze Block
A building block made from concrete and cement.
- Bridging loan
A temporary loan enabling someone to purchase a property before selling his or her existing one.
- Broker's fee
A fee charged by a broker for finding and facilitating a suitable mortgage.
- Building survey
A full inspection of a property and a report on its condition, highlighting any problems and work that will be needed. Most suitable for older or poorly maintained properties, or a property you intend to alter or extend.
- Buildings and contents insurance
Insurance to cover damage to or loss of your home and its contents, in the event of a fire, for example.
- Buy-to-Let mortgage
A type of mortgage that is designed specifically for people buying a property with the intention of letting it to a tenant.
Also known as equity, capital is an asset that is less liquid than cash. It represents the amount of money you have put into a property, investment or deposit.
- Capital and interest mortgage
A mortgage where part of the monthly payment reduces the outstanding mortgage balance and part repays the interests on the loan.
- Capped mortgage
A mortgage where there is an upper limit on the interest rate, but a flexible lower limit, if a lender increases or reduces interest rates.
A means of notification that protects an interest in an unregistered estate. Whoever registers the caution is notified when an application for first registration is received, so they can choose whether to take action or relinquish their interest.
- Cavity wall
An external wall which has been constructed with a gap of about 50mm (two inches) between the two leaves of brick or block work.
- Cavity wall insulation
Insulating material used to fill the cavity wall - usually polystyrene beads, foam or rockwool.
- Cavity wall tie
A strengthening piece of metal fixed between the inner and outer leaves of a cavity wall.
A BTL mortgage is used to purchase a property for letting. Depending on circumstance, you will be classified as a Business BTL customer or Consumer BTL customer in line with the Mortgage Credit Directive. Your mortgage broker can provide additional information.
- Certificate or report on title
A standard form used by solicitors to request the mortgage or loan funds from the lender.
A situation that occurs when a buyer needs to complete the sale of his or her existing property, to complete the purchase of his or her new property.
A loan that is secured against land or property.
- Charge certificate
A document produced by the Land Registry that certifies proof of ownership. This will be required by a lender if a property is to be used as collateral against a loan.
- Check in
The meeting at the start of the tenancy where the inventory and condition of the property are agreed. The tenants will meet with an independent inventory clerk, the landlord or the landlord's representative.
- Check out
The meeting at the end of the tenancy when the inventory and condition of the property are agreed. As with check in, the tenants will meet with an independent inventory clerk, the landlord or the landlord's representative.
- Claim notice – Section 79
This refers to a claim to acquire the right to manage any premises, made by giving notice of the claim and the relevant date (the date on which notice of the claim is given).
- Cleared funds
Money that is available instantly without clearing through the banking system. This is usually cash, bank automated credit or a banker's draft.
- Client account
An account set up in a bank, building society or other financial institution set up specifically to hold money on a client’s behalf.
Property or equivalent value that serves as a guarantee of the repayment of a loan.
- Collective Enfranchisement
Enables leaseholders to buy their freehold conditional upon fulfilling certain qualifications. This can also include right of first refusal if the Landlord decides to sell their freehold interest.
- Combination boiler
A type of boiler than gives you heating and hot water on demand, without using hot and cold water tanks.
- Commission or fee
The sum of money paid to an agent or auctioneer for facilitating a property transaction.
- Common areas
The areas not owned by any individual lessee but shared by all owners in an apartment block or estate. They may include car parks, entrance halls, gardens, lifts and corridors.
- Common household
A residential property that is self contained and shared by two or more tenants. Tenants are usually jointly and severally liable under the tenancy agreement.
- Commonhold and Leasehold Reform Act 2002
This Act of Parliament makes provision about commonhold land and amends the law about leasehold property. Part of the Act makes provision for leaseholders to assume the responsibility for the running of their building. It also ensures the reasonableness of service charges.
- Company let
A tenancy let to a bona fide company.
- Competent landlord
In the context of Lease extensions and freehold purchase, a competent landlord is the person who, in relation to the relevant tenancy, has sufficiently superior interest in the property to be able to grant an extension to the lease. To identify the competent landlord, you would need to know the details of all landlords who may be between you and the freeholder and especially the length of term of any intermediary landlords’ leases.
The final stage of the legal work, when the ownership of the property passes to the buyer.
- Completion date
The date that a contract takes effect and property ownership passes from seller to buyer.
- Completion statement
A list of all the financial aspects of a transaction. Produced by a solicitor, it sets the costs against the money being received and shows whether money needs to be paid to the client or whether a shortfall needs to be made up before completion.
A written and signed agreement between buyer and seller or landlord and tenant.
- Contract race
When a seller deals with more than one prospective buyer and exchanges contracts with whichever is ready first.
- Contractual obligation
A binding obligation imposed on parties in a contract which, if not complied with, breaches the contract.
- Contractual term
The fixed period of time for which a contract is legally binding to those involved.
The sub division of a residential property into bedsits, self contained flats or maisonettes.
A person qualified to undertake conveyancing. Either a solicitor or licensed conveyancer.
The term used to describe the legal process of transferring a property from one owner to the next.
- Council tax
A local authority tax that the occupant of a property is legally required to pay.
- County Court Judgement (CCJ)
A judgement against an individual to pay an outstanding debt, issued by a magistrate.
An agreement contained within a contract or a deed that binds somebody to do something (or not to do something).
Promises made by either the landlord or tenant in a tenancy agreement to refrain from, or engage in, specified actions.
- Credit check
A routine inquiry into a person’s borrowing and repayment history, usually performed by agencies on the behalf of a lender when reviewing an application for any form of credit e.g. a mortgage.
- Credit history
Stored data of an individual’s borrowings and repayments, used to help assess the risk of lending.
- Credit rating
An aggregated assessment of a person`s credit history. The better your credit history, the better your credit rating and the more likely you are to be approved for loans such as mortgages.
- Credit reference agency
A company that collects and assesses financial records, utilised by lenders to help appraise a prospective borrower’s credit history.
- Credit report
The assessment of an individual’s credit history, usually compiled by a Credit Reference Agency and used by lenders to assess applications for credit.
- Credit search references
References requested for a tenant applying for rented accommodation. Many agents and individual landlords use external companies who will contact the applicant’s employer, landlord and check the tenant’s credit history, providing a report on their financial suitability to rent.
Also known as dilapidations. This means damage to the rented property caused by tenants, or because the terms of the tenancy agreement have been breached.
- Damp proof course
A layer of waterproof material incorporated into a wall to prevent dampness rising or encroaching around doors and windows.
A formal document of property ownership.
- Delayed completion
Any completion that takes place 28 days or more after the exchange of contracts.
When buying: The amount of money paid by the buyer on exchange of contracts, usually 10% of the purchase price.
When renting: A monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms. This is usually the equivalent to six weeks’ rent, but may vary. If the deposit is for an Assured Shorthold Tenancy (AST) then it must be protected by one of the approved tenancy deposit protection schemes.
- Digital Signature
A method of signing a document electronically, instead of by ‘wet’ signature.
Damage to a property or its contents that exceeds acceptable wear and tear.
- Direct Debit
We collect rental payments from tenants during a tenancy on behalf of landlords by means of a direct debit. This is an application to the tenant’s bank to make the payment each month (or as often as the rent is due). The amount can be varied if necessary.
Fees paid by the buyers solicitor on his or her behalf, which include Stamp Duty, Land Registry and search fees.
- Discounted rate
A mortgage with an interest rate lower than the lender’s Standard Variable Rate (SVR).
- Draft contract
The first version of the contract of sale issued by the seller's conveyancer to the buyer's conveyancer.
- Dry rot
A fungus that can cause serious damage to a property by attacking structural timbers. Flourishes in moist, damp, poorly ventilated areas.
- Due Diligence
A process of performing duties to a professional standard.
- Duty of Care
An obligation owed to others, specifically landlords and tenants, to provide the correct advice regarding lettings and ensure the wellbeing and safety of those who may visit the property.
- Early repayment charge
A charge made by a mortgage lender if the borrower repays all or part of the mortgage before a certain date, often the end of a special deal, on a fixed rate or capped rate, for example.
A right granted over a property or land e.g. a right of way.
This a term given to the rights a person may enjoy over another property such as drainage rights, access to a neighbour’s land to carry out maintenance on their own property.
- Electrical Installation Condition Report (EICR)
A record produced by an electrician qualified to do so, which shows the safety of the electrical installations in a property. For rented properties this should be renewed every five years.
An obligation or liability attached to a property. Property may be bought or sold even though there are encumbrances attached to it. Encumbrances are attached to the property and not to the property owners and therefore a person who buys property with the encumbrance is bound to the encumbrance.
- Endowment mortgage
A mortgage where only the interest is paid to the lender and monthly premiums are paid into an endowment policy, with the aim to pay off the mortgage at the end of the specified term.
- Energy Performance Certificate (EPC)
A certificate that outlines the energy efficiency and environmental impact of a property. It gives standard ratings for energy efficiency and carbon emissions, rated from A (the most efficient) to G.
Questions from the buyer's conveyancer, often about survey or property information forms.
- Environmental report
A report on the land uses of a property and its surroundings now and in the past. This will indicate the likelihood of contamination or pollution.
- Equitable interest
Legal rights in a property that do not include the right to sell its legal title.
The difference between the value of a property and the amount of mortgage outstanding.
- Equity release
A loan leveraged against a fully owned asset such as a property in order to liquidise capital.
A sum of money payable in advance of any insurance claims being settled.
- Exchange of contracts
The point at which the signed contracts to buy and sell are exchanged along with your deposit, to legally commit the buyer and seller to the transaction, at the price agreed.
- Execute a tenancy
The finalising of a legally valid tenancy agreement, by dating and exchanging the Original (signed by the landlord) and the Counterpart (signed by the tenant) contracts. The date is legally considered to be the date on which the agreement was made.
The officially witnessed signing, sealing and delivering of a deed.
- Existing liabilities
The financial obligations you are committed to honouring at the time of applying for a mortgage e.g. loan repayments.
Also known as a renewal. This is used to extend or continue the tenancy after the original term has expired.
Contracts to let residential property are usually for a fixed term. At the end of that term an extension may be negotiated, which can be referred to as a renewal, an extension or a continuation.
- Feasibility study
An evaluation or analysis of the ability to complete a project successfully, from land acquisition to sales. This takes into account pricing, accommodation mixture and layout, and local market demands.
- Fixed rate mortgage
A mortgage where the rate of interest is fixed for an agreed period of time.
- Fixtures and fittings
When buying: Fixtures are items that have become part of a building or land and are therefore included in the sale. Fittings are not attached to the building or land and so are not included in the sale unless otherwise agreed. The seller will complete a fixtures and fittings form that will confirm what is included in the sale, what isn't included, and what is for sale separately.
When renting: Items usually provided in a letting that may include curtains, carpets, blinds, light fittings, kitchen units and appliances. In some cases it may also include furniture. It is advisable to check what is provided and not to assume that items will be provided.
A section of material (normally metal or cement) used to prevent water from penetrating a roof joint.
- Flexible mortgage
A mortgage where the lender will allow increased or decreased payments, during its term. Before decreased payments are allowed, overpayments would normally have been made.
A pipe or duct attached to an appliance to allow fumes to escape.
- Flying freehold
Part of a freehold that overhangs or underlies another e.g. a bedroom or balcony that overhangs a shared passageway.
An underground structure that supports a building or wall.
Refers to the ownership of the property and means that it belongs to the owner without limitation of time, unlike a leasehold.
The owner of a freehold property.
Financial Services Authority.
- Full Repairing and Insuring (FRI)
The lease term that details a tenant’s responsibility to carry out repairs and maintenance on a property.
- Gas safety record
A certificate that states all gas applicances, pipework and flues are safe. It's a legal requirement for all landlords, and must be carried out every year by a CORGI registered engineer.
- Gas Safety Regulations
The landlord must ensure that a check is carried out prior to a let, and then annually, on all gas appliances, meters, pipework and flues to ensure they are safe. An authorised Gas Safety registered engineer must carry out the check and a copy of the record must be given to the tenant before the start of the tenancy (and within 28 days of any record renewal).
When a seller has accepted an offer, but subsequently accepts a higher offer from another bidder.
When a buyer reduces their offer to purchase at the eleventh hour.
Also known as leverage, this is when a buyer uses loaned funds to make an investment and turn it into profit e.g. taking out a mortgage on a property, then selling it after the value has risen sufficiently to cover the costs of the loan and turn a profit.
- Ground heave
The swelling of clay subsoil which has absorbed water. This can cause foundations to move upwards.
- Ground rent
The charge made by the freeholder to the leaseholder as a right to occupy a property.
- Grounds For Possession
The reasons set out in the Housing Act 1988 (as amended) for applying to the courts for repossession of a property.
When buying: A third party who undertakes to ensure mortgage payments are made in the event that the borrowers fail to do so.
When renting: A person who is prepared to act on behalf of a tenant to guarantee rental payments and other obligations of a tenancy. The guarantor is liable for rental payments if a tenant is unable to pay them, which means the guarantor will need to have a regular income or sufficient assets. References or credit search references will usually be taken up on a guarantor, as well as the tenant, prior to a tenancy agreement being reached.
An opening into a drain, normally at ground level, which receives water from downpipes and wastepipes.
The date or time when tenants are allowed to begin their occupation of a property.
- Head lease
This sets out the promises the landlord has made to their superior landlord. Where appropriate, the promises contained in this head lease will bind the tenant if he or she has prior knowledge of those promises.
- High rent tenancy
Refers to a tenancy agreement where the rent is over £100,000 per annum, also known as a contractual tenancy.
- Higher lending charge
An insurance policy that a mortgage lender may insist upon, to cover the amount of loan above a certain percentage of the property's value. The higher lending charge insurance policy has a one off premium, normally payable by the borrower.
- Holding Deposit
This is an amount that a tenant will be required to pay when applying for a tenancy of a property. If the tenancy does not proceed because the tenant pulls out or the references are unacceptable, this deposit is often retained by the agent to cover costs. Assuming the tenancy proceeds, the amount is normally deducted from the first month’s rent.
- Homebuyer's report or survey
A homebuyer's survey includes more detail than a mortgage valuation but doesn’t include as much detail as a full structural survey. The report will tell you about any major problems with the building, the general condition of the parts of the building that are reasonably accessible, anything that could be expensive to fix in the future and any suspected problems, like timber infestation or damp that might need specialist advice.
- Houses in Multiple Occupation (HMO)
A standard HMO is created if there are three or more occupants who are not related, living in a property (including children). If the property is arranged over three floors and is let to five or more occupants who are not all related, then the landlord will need obtain a licence from the local authority and comply with conditions of the licence before letting the property. Some local authorities impose additional licensing for HMOs and set their own criteria. A landlord should always check with their local authority before letting a property. Other types of HMO exist, such as properties divided into bedsits with shared facilities or certain blocks of flats.
- Housing Act Tenancy
This applies to tenancies which fall within the scope of the Housing Act 1988 & Housing Act 1996.
- Housing Health and Safety Rating System (HHSRS)
A system introduced by the Housing Act 2004 for local authorities to assess housing conditions in England and Wales. It is a landlord’s responsibility to make sure the property being let is safe for the occupants and visitors.
- ICE - Independent Case Examiner
An independent referee for people who have a dispute about the deposit at the end of the tenancy.
An investment that cannot easily or quickly be turned into cash.
- Improvement rate
This is the rate by which the value of a flat increases by virtue of it having an extension to the lease, in the context of lease extensions and freehold purchase.
- Indemnity insurance
Insurance against any aspect of a property transaction such as an adverse search result or breach of planning/building regulations. This will not solve any problems but it will provide compensation.
- Initial monies
The monies paid by a tenant before the tenancy starts. This will cover the deposit, rent for the first month or quarter, tenancy agreement fee and check in charge.
- Initial term
This describes the first period of the tenancy.
When an estate agent is formally instructed to market a property on behalf of the seller.
- Interest charges
The charges that a mortgage lender levies on a loan, as a percentage of the amount outstanding.
- Interest only mortgage
A mortgage where the monthly payments to the lender cover the interest only. Most borrowers with an interest only mortgage have a savings vehicle to repay the amount of the loan at the end of the mortgage term.
An inventory details the contents and state of condition of a property, as well as its fixtures, fittings and outdoor space. A tenant should be checked into the property at the start of the tenancy and checked out of the property at the end of the tenancy using the inventory. We recommend that a professional inventory clerk is employed to draw up the inventory and carry out the checks.
- Joint & several liability
Where there is more than one adult making up “the tenant” the tenancy will say they are “jointly and severally” responsible. This means each person will be responsible for complying with the obligations under the tenancy agreement, both individually and together. The landlord may seek to enforce the obligations and claim damages against any one or more of those individuals.
- Joint and several
Where the landlord or tenant means more than one person, they all take responsibility for their obligations, both individually and together.
- Joint tenants
Where a property is purchased under joint tenancy. Normally used for husband and wife purchases because if one of the owners dies then his/her share will automatically pass to the survivor. Also see tenants in common.
- Land certificate
A document certifying proof of ownership, issued by the Land Registry.
- Land Registry
The Government department responsible for registering ownership of land.
- Land Registry fees
A fee paid to the Land Registry to register the ownership of a property.
The person(s), company or body that has the right to let the property.
Movement of earth, clay etc downwards, because of heavy rain or a lack of soil stability.
A legal document the freeholder issues, which grants tenure for a given period of time. It sets out the insurance and repair obligations of both parties. A tenancy agreement can also be called a lease, but a lease usually refers to a longer let or an agreement between a superior landlord and the landlord.
Owning a property for a fixed term but not the land on which it stands.
- Leasehold information
Detailed information about the property being sold, provided by the managing agent or freeholder. Includes details of service charges, ground rent and general expenditure, insurance and any maintenance works in hand or proposed.
Whomever is granted a lease.
The person taking the lease, usually the tenant.
Refers to the person responsible for granting a lease, usually the landlord.
An agreement to let a particular property.
The legal right to keep possession of a property belonging to someone else, until an owed debt has been repaid.
A horizontal structure beam found over a window or door opening.
- Loan to Value (LTV)
The amount of mortgage, shown as a percentage of the property's value.
- Local Authority search
Application made to the Local Authority for information that may affect a property. The search results will show such things such as planning restrictions and whether the roads have been adopted and are maintained by the council.
- Maintenance charge
An amount paid by a leaseholder as a contribution to the cost of maintaining and repairing the structure of the building and its insurance. Can be paid to a landlord, managing agent or management company. Also known as service charge.
- Maintenance or service charge
Costs incurred by the freeholder for repairing and maintaining common parts of a building, occupied by leaseholders.
- Management company
Leasehold property - a management company will usually be set up to administer the affairs of a block of leasehold properties. Typically, management companies in this context are RMCs or RTMs. The management company, or more usually their agent, deal with the day to day running of the property, repairs and renewals. They collect a service charge from the property owners (normally shareholders in the management company) to pay for the upkeep and maintenance of the building and for the administration of this service.
- Managing agent
A professional or company responsible under an agency agreement for the maintenance and management of a property.
- Managing agents
An agent authorised to manage the business affairs in connection with the property of another such as a landlord, an RTM, an RMC or a developer.
The ground level access point to a drain, with a removable cover. Also known as an inspection chamber.
- Minimum Energy Efficiency Standards (MEES)
From 1st April 2018, all properties let or renewed on an assured shorthold tenancy, or any assured shorthold tenancy extended as a statutory periodic tenancy after that date, must comply with MEES. This means that the energy efficiency rating on the EPC must be between A-E or the property listed on the PRS Exemption Register. From 1st April 2020, this will apply to any property let on an assured shorthold tenancy at that time.
An amount of money advanced by a lender, normally a bank or building society, secured on a property.
- Mortgage deed
A legal document confirming the terms of a mortgage and the lender's interest in the mortgaged property.
- Mortgage Indemnity Guarantee (MIG)
An insurance policy against any potential losses suffered by a lender due to a mortgage default.
- Mortgage offer
The terms and conditions that facilitate the agreement of a loan. They are stipulated by the lender and must be complied with by the borrower.
- Mortgage rate
The standard variable interest rate quoted by all mortgage lenders, which is normally related to the base rate set by the Bank of England.
- Mortgage term
The length of time a mortgage runs for and by when it should be repaid in full.
- Mortgage valuation
A basic survey of a property to assess its value and suitability for a mortgage. Mortgage lenders will insist on this before a loan is advanced.
The mortgage lender e.g. a bank or building society.
The person borrowing money against the value of a property.
- Multiple agency
When a vendor instructs two or more agents to sell a property. Only the agent that introduces a suitable purchaser gets paid.
National House Builder Council. The NHBC provide a ten year insurance policy on the main structure of new properties.
- Nominal interest rate
An interest rate that does not account for inflation.
- Non-Housing Act
Residential tenancies that do not fall under the provisions of the Housing Act 1988 and Housing Act 1996 are sometimes known as Non-Housing Act Tenancies.
- Notice period
The amount of notice that the landlord must give the tenant to end the tenancy and vice versa.
- NRL 1
This is a form a Landlord may send to HM Revenue & Customs for approval to receive rents gross of income tax if he or she is going to be living outside the UK for more than six months in a year. There are different forms for individual landlords, companies, charities and trusts.
- Occupancy rights
These are contained within the tenancy agreement and give the tenant right of occupancy of the property.
- Off market
The property is yet to reach the mass market. This means that this property is not currently being openly marketed, though it may have been in the past.
- Off plan
Signing a contract to purchase a property that is yet to be built. The buyer will be able to view the design and building plans while the property is under construction.
- Office copies
Certified copies of entries on a register title, provided by the Land Registry.
- Open Market Value (OMV)
The expected amount a property should sell for, assuming all things are fair and equal in terms of marketing, up to date knowledge and the situations of both parties involved.
A layer of concrete below a timber ground floor above the external ground level.
- Owner occupier
The person who owns the property who is, has been and will be living in the property as his sole or principle residence.
Landlord and tenant (and possibly a guarantor) who come together to sign a tenancy agreement are collectively known as ‘parties’ to the agreement.
Refers to a Rental figure and stands for ‘per calendar month’. Remember, there are more than four weeks in a calendar month.
- Peppercorn rent
A very low ground rent.
- Planning permission
Official consent/approval from a Local Authority for works undertaken on a property.
A layer of plaster sandwiched between heavy paper. Widely used for walls and ceilings.
- Power of Attorney
A legal document giving a third party an absolute or limited right over the principal’s property and assets.
- Preliminary enquiries
The initial enquiries, about the property being sold, raised by the buyer's conveyancer at the early part of the conveyancing process.
A part or parts of a building which may include boundaries, fences, gardens and outbuildings, belonging to the Landlord unless they have been specifically excluded from the tenancy. When the tenancy refers to part of a larger building, the premises include the use of common access ways and facilities.
- Premises or property
The address of the property. This means all parts of the building belonging to the landlord, including boundaries, fences and garden unless they are specifically excluded. If the property is part of a building, like an apartment, this also includes the common parts.
- Prescribed information
This refers to specific information that the Housing Act 2004 Sections 213 (5) (6) and The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 require to be provided to the tenant within 30 days of the deposit having been received.
- Private rented sector
The industry concerned with the letting of residential property owned by private landlords.
- Private treaty (for sale by private treaty)
The most common agreement for the sale of a property, negotiated either directly between a purchaser and a vendor, or by their respective agents on their behalves.
The official proving of the validity of a will, including the value of any properties included. The sale of a property included in an estate cannot be completed until the property has been valued for inheritance tax purposes and probate has subsequently been granted.
- Property Information Form (PIF)
Also known as a Protocol Form the PIF is provided by the seller's solicitor and is completed by the seller. It forms part of the conveyancing process and covers such matters as boundaries, services, guarantees for work carried out and planning consents.
- Property Information Questionnaire (PIQ)
This is issued by the HIP provider and forms part of the HIP. It must be completed by the seller to provide details relating to the ownership of the property and information about services such as council tax banding and the utilities.
- Public Liability Insurance
An insurance policy that aims to protect members of the public who are injured or affected by an accident or occurrence.
The horizontal beam supporting the rafters in a roof space.
One of the sloping roof beams that form the shell of the roof.
The annual rate of interest charged against a loan, expressed as a percentage.
- Real Estate Investment Trust (REIT)
A company or group that owns commercial or residential property for the purpose of producing income. These groups do not pay tax on rent or capital gains, but are required to pay tax on any dividend and appreciation.
- Real interest rate
The rate of interest an investor receives after accounting for inflation. For example, if you are earning 5% interest and inflation is currently at 4%, the real interest rate is 1%.
When a mortgage is repaid in full.
Allows a landlord to check a tenancy applicant’s suitability to be able to pay the rent and also the applicant’s track record in earlier rentals. This often involves contacting previous landlords, the present employer (or accountant if self employed). We use the services of an independent referencing company on behalf of the landlord.
- Registered land
Land (including buildings on it) the title to which is registered at the Land Registry and legal ownership is guaranteed.
Refinancing a property where by either moving a mortgage to another lender and/or increasing the amount of loan to raise capital.
The covering of cement or plaster on a wall.
- Repayment mortgage
A mortgage where the monthly payments are a combination of interest and capital, to repay the whole amount by the end of the agreed term.
When a borrower defaults on their loan repayments, their interest in the property that was used to secure the loan can be forfeited. The property is often then sold at auction so the losses can be recouped by the lender.
- Resident landlord
Where the Landlord occupies part of the dwelling as his main or principle home and lets the rest of the property.
- Residents Association
An organisation formed by the leaseholders and residents within a block of flats or an estate, in order to come together to address issues. The Association must be formally recognised by the landlord by having a formal constitution with properly nominated officers voted for at AGM. The running of the Association must be democratic and representative. Also known as a Tenants Association.
Where a mortgage lender retains part of a loan, pending satisfactory completion of specified works.
- Right of way
The legal right to use a particular route or path, usually in order to gain access to a property.
- Ring fenced
Refers to money held in such a way that it can only be used for a specified purpose. For example, a tenancy deposit can be used only for the purposes set out in the tenancy agreement.
- Rising damp
Moisture in a wall that rises from below ground level. This can then lead to decay in the fabric of the wall.
- Sale statement
This document tells the buyer the address of the property, who the seller is and whether it is freehold or leasehold.
- Schedule of condition
A document that works alongside the inventory to explain the condition of the property at check in and check out.
The final smooth finish of a floor, usually laid in cement or concrete.
Enquiries raised by a buyer's conveyancer to a local authority to establish any issues likely to affect the property now or in the near future.
- Service charge
Amount paid by a leaseholder as a contribution to the cost of maintaining and repairing the structure of a building and its insurance. Can be paid to a landlord, managing agent or management company. Also known as maintenance charge.
Movement of a building or structure, often as a result of age. This is acceptable within certain limits.
- Share of freehold
Share of freehold means that when you buy a flat, the lease on the property comes with a share of ownership of the building. Leaseholders in a block with several properties often choose to buy the freehold between them and so share of freehold gives them more control over the management of the property.
- Shared equity
When a borrower purchases part, but not all, of a property and the rest is owned by another person or group. This is usually because the borrower cannot afford the property outright.
- Sitting tenant
A person who has the legal right to occupy a property without a lease.
- Sole Agent
When a single agent is instructed to undertake a sale or let.
- Sole selling rights
When an agent is the only agent or person with the right to sell a property on your behalf. They will be entitled to a fee if the property is sold in the agreed time period, even if you sell it by other means.
When the letting agent holds the deposit in a designated account and at the end of the tenancy deductions can only be made with the written consent of both parties.
- Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax (SDLT) is a tax paid by the buyer of a UK property when the purchase price exceeds £125,000. The stamp duty rate ranges from 2% to 12% of the purchase price, depending upon the value of the property bought. Like income tax, each rate only applies to the part of the property that falls within the tax band.
From 1 April 2016 anyone purchasing an additional residential property such as a buy to let or second home will be charged a 3% surcharge on each of the threshold bands.
For the purchase of replacement of a main residence Purchase price bands (£) Rate (%) Between £40,001 and £125,000 0% Between £125,001 and £250,000 2% Between £250,001 and £925,000 5% Between £925,001 and £1.5 million 10% Over £1.5 million 12% For the purchase of ‘additional’ property* Purchase price bands (£) Rate (%) Between £40,001 and £125,000 3% Between £125,001 and £250,000 5% Between £250,001 and £925,000 8% Between £925,001 and £1.5 million 13% Over £1.5 million 15%
*Additional 3% SDLT for purchases made from 1 April 2016.
Corporate bodies purchasing property at more than £500,000 will pay 15% stamp duty.
When renting: A landlord has to pay SDLT if the income from a short term property let (up to seven years), residential tenancy or lease is above the threshold.
For more information and for help calculating the amount of SDLT you might owe on residential properties, use our stamp duty calculator.
- Standard Variable Rate (SVR)
The rate of interest set by lenders that can rise and fall for the duration of your repayments, usually in line with various economic conditions such as inflation and the Bank of England base rate.
- Standing order
A standing order mandate is an instruction that the tenant makes to their bank to make a regular payment. Normally rental payments are made each month and the instruction will state the number of payments or will continue to be paid until cancelled by the tenant. A landlord or agent cannot cancel a standing order mandate, only the person whose bank account the funds are coming from.
- Statutory obligations
Requirements and obligations placed on landlords and/or their agents by Acts of Parliament i.e. Law of the Land.
- Statutory periodic tenancy
Statutory periodic tenancy is created when a fixed term Assured Shorthold Tenancy comes to an end and the tenant remains in the property under the same terms and conditions as the original agreement. A statutory periodic tenancy will run from month to month (or quarter to quarter depending upon the basis on which the rent is paid) until formally ended.
- Structural survey
A survey of the condition of a property conducted by a qualified surveyor, detailing whether or not the property is structurally sound, as well as any defects that may require work to be undertaken.
- Stud partition
A lightweight wall that has a timber frame and is lined with plasterboard.
- Studio apartment/flat
A flat with a bedroom and living room all in one, either with a separate kitchen or corner of the main room as a kitchen, with a separate bathroom and toilet.
- Subject to contract
Signifies that an agreement is not yet legally binding.
The action of a tenant letting accommodation to be occupied by another person for a lesser term.
What happens when the ground moves downwards.
- Superior landlord
A person to whom the ownership of a property might revert to at a later stage, for example an apartment with a 99 year lease.
- Superior lease or head lease
The lease that the landlord holds, where the owner has a leasehold interest, but another individual owns the freehold. There is then a lease with the freehold under which the landlord is responsible for obligations/covenants. When a property is let out, the tenant renting the property then also has to comply with any of these obligations e.g. not to hang washing on a balcony.
- Tax approval
If a letting agent collects rent for a landlord during a tenancy and the landlord is living outside the UK for more than six months in the year, then the agent must deduct tax from that rent and pay it over to HM Revenue & Customs quarterly. However the landlord can apply to HMRC for an ‘Approval’ to receive the rent gross and if he or she agrees to account for any income tax due at the end of the financial year directly to HMRC, HMRC will issue an ‘Approval Number’ directly to the agent.
- Telegraphic transfer
The electronic transfer of funds from one bank account to another.
- Tenancy agreement
A legally binding document containing details of rental terms, sometimes referred to as a rental agreement or a lease. It will state the details of the parties (the landlord and tenant), the rental price, the amount of the deposit and the property address, along with the covenants and obligations of the let.
- Tenancy at will or licence
An agreement reached between a vendor and purchaser, if the latter wishes to take possession of a property before the transaction is legally completed.
- Tenancy Deposit Protection
Any monetary deposit for an AST must be protected by one of the three approved schemes within 30 days of the money being paid by (or on behalf of) the tenant. All three schemes have an 'insured' or 'custodial' option.
- Tenancy Deposit Scheme (TDS)
The TDS is a scheme run by The Dispute Service Ltd. for the protection of tenancy deposits and the resolution of disputes between landlords, agents and tenants concerning the return of deposits at the end of a tenancy. It is one of three schemes approved for tenancy deposit protection.
The person(s), company or organisation who is entitled to occupy a property under the terms and conditions of a tenancy agreement.
- Tenants in common
Where a property is purchased jointly with equal or unequal shares. Normally used for husband and wife purchases because if one of the owners dies then his/her share will automatically pass to the survivor. Also see joint tenants.
When a property is for sale by tender, there is no stated asking price. The property is then marketed as normal and offers are invited before a specified closing date. In this case, acceptance of an offer constitutes an immediate contract between the parties, but often the vendors advertise that they reserve the right to refuse even the highest offer.
The type of ownership, either freehold or leasehold.
- Term or tenancy
This is the total amount of time the tenant is living at the property, including any extensions or renewals.
Refers to the ending of a tenancy.
- The term of tenancy
This refers to the length of a tenancy. Most initial tenancy agreements are for a minimum of six months, although they may be shorter and longer.
- Title deeds
Documents proving legal ownership of the property. Generally held by the Land Registry.
- Title report
A document produced by a solicitor that certifies title to a property.
- Title search
The search for, and retrieval of, documents detailing the history of ownership of a property, usually conducted by a solicitor or conveyance.
A mortgage with an interest rate that exactly follows another established rate or index, such as the Bank of England base rate.
- Transfer deed
Land Registry deed transferring ownership to a buyer. This will be prepared by the buyer's solicitor.
- Under offer
If a vendor has officially accepted an offer to purchase but the transaction is not yet legally binding, then the property is said to be ‘under offer.’
A further lease of whole or part of a property granted by an existing tenant.
A situation that allows for a mortgage not to be fully repaid in the agreed timeframe, usually with reduced payments.
Placing a stronger foundation underneath the weaker original one.
A property that has been secured without any borrowings.
These are normally electricity, gas and water and may be referred to as services which, under most circumstances, the tenant is responsible for paying for.
- Vacant possession
The right of a purchaser to ask existing tenants to vacate a property upon completion of the purchase.
A routine survey conducted by a qualified surveyor to ascertain the value of a property, usually for the benefit of a lender, to ensure the security of the property against a loan.
Seller of a property.
- Wet rot
When timber decays because of damp conditions.
General term for insects attacking timber within a property.
Refers to income from a property calculated as a percentage of its value.