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Glossary
Some of the technical terms that you may come across in the process of buying and selling property in the UK.
Advance. A loan of money, usually a mortgage.
APR. "Annual Percentage Rate" is a standard method of calculating the amount of interest charged on a loan, so you can more easily compare the products of different companies.
Arrangement Fee. A charge made by some mortgage lenders and brokers for their services, which they are legally obliged to warn you about.
Base Rate. The official interest rate set by the Bank of England that other banks and mortgage lenders use as a guide to base their own interest rates for borrowing and lending money.
Buildings Insurance. Insurance that covers you against the risk of structural damage to your home or other buildings, caused by major events such as fire, flooding and subsidence.
Building Survey. An inspection and report on the structural condition of a property, prepared by a qualified professional such as a Chartered Surveyor.
Capped Rate. A type of mortgage where the interest charge is "capped", so that it will not rise above the agreed amount.
Cashback. A type of mortgage that provides you with an immediate cash payment for you to spend.
Completion. The final stage in the legal process of transferring ownership of property, when the purchase money is paid and the Conveyance takes place (in Scotland known as Settlement).
Conservation Area. An area designated as being of 'special architectural or historic interest', where the local authority has extra controls over the demolition of property, minor developments and the protection of trees.
Contents Insurance. Insurance that covers you against the risk of loss or damage to your possessions within your home, such as furniture, carpets, TVs and other items that you have.
Contracts. The stage in buying and selling when both the buyer and the seller are legally committed to the deal (also known as "Exchange of Contracts").
Conveyance. The legal document that transfers ownership of property from the seller to the buyer. "Conveyancing" is the process of preparing and executing the documents. A "conveyancer" is a professionally qualified person dealing with the conveyancing process, who must either be a solicitor or a licensed conveyancer.
Disbursements. Expenses and other costs that may be added to a bill by your solicitor or other professional.
Easement. A legal agreement that allows an owner to make use of another person's property for a specific purpose, such as a pedestrian right of way, drains or other services passing under or over adjacent land.
Equity. The value of your property minus the amount of any outstanding mortgage.
Financial Services Authority (FSA). An independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000, with responsibility to regulate businesses who offer financial services in the UK.
Fixed Rate. A type of mortgage where the interest charged on the loan is fixed and cannot go up or down for a set period of time.
Freehold. One kind of legal title to property, where you own the both the buildings and the land they stand on (also known as "fee simple").
Gazumping. After you have done a verbal deal to buy a property at an agreed price, the seller accepts a higher offer from someone else - you have then been "gazumped".
Ground Rent. A fee paid by a leaseholder to the freeholder, according to the terms of the lease.
Guarantor. A person who agrees to guarantee an agreement for someone else, such as the repayment of a mortgage.
Instruction. When a seller instructs an estate agent to market a property for sale.
Interest Only. A type of mortgage where your monthly payments to the lender cover only the interest on the loan, but do not include any repayment of the actual amount borrowed.
Joint Tenants. If you buy a house jointly with someone else as 'joint tenants' then each of you jointly own the entire property (see also 'Tenants in Common').
Land Registers of Northern Ireland. The government agency responsible for recording details of the legal interest in land in Northern Ireland.
Land Registry. This is the official government register where the ownership of all property in England and Wales is recorded.
Leasehold. This is a form of property ownership where you have the right to occupy land or a building for a specified length of time, known as a lease. A leasehold interest in property can be bought and sold on the open market, just like a freehold.
Life Assurance. This is an insurance policy that pays out when someone dies within a certain time and is commonly used to give protection to a family against debts, such as a mortgage, if the insured person dies before the mortgage has been repaid.
Listed Building. When buildings are 'listed' they are placed on statutory lists of buildings of 'special architectural or historic interest' and owners may need to get special permission if they wish to carry out any alterations.
Mortgage. A loan secured on land or buildings. The mortgagee lends money to the mortgagor, who offers their property as security for the loan.
Real Property. Generally refers only to either land or buildings.
Registers of Scotland. The government agency responsible for Scotland's land and property registers.
Settlement. In Scotland, the term for Completion (see above).
Sole Agency. Where a seller agrees to instruct only one estate agent to sell the property (usually for a limited period of time).
Subject to Contract. Provisional agreement made between the buyer and seller, but not legally binding until a written contract has been prepared and accepted by both parties.
Tenants in Common. If you buy a house jointly with someone else as 'tenants in common' then each owner has a separate share in the property and is only entitled to that proportion of the sale proceeds if the property is sold (see also 'Joint Tenants').
Title. Ownership of real property, usually either freehold or leasehold.
Tree Preservation Order. This provides protection for those trees specified in the Order and makes it a criminal offence to cut down, top, lop, uproot or wilfully damage or destroy any tree, without official consent.
These notes are offered as a general guide only and do not constitute legal or financial advice.
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