Property glossary

Every bit of property jargon, in plain English.

A

Additional Dwelling Supplement (ADS): An extra charge on top of LBTT in Scotland when you buy an additional residential property, such as a second home or buy-to-let, for which you pay the supplement in addition to the standard rates.; See also: LBTT, Buy-to-let
Agreement in principle: A statement from a lender saying how much it would probably lend you, based on basic information and a credit check. It is not a guaranteed mortgage offer but shows sellers and agents you are a serious buyer.; See also: Mortgage offer, Deposit
Arrangement fee: A fee charged by a lender for setting up a mortgage. It can often be paid upfront or added to the loan, though adding it means you pay interest on it.; See also: Remortgage

B

Base rate: The interest rate set by the Bank of England's Monetary Policy Committee. It influences the rates lenders charge, and tracker mortgages move directly in line with it.; See also: Tracker mortgage, Standard variable rate (SVR)
Buy-to-let: Buying a property to rent out to tenants. Buy-to-let mortgages usually need a larger deposit and are assessed on expected rental income as well as your own finances.; See also: Rental yield, Section 24, Stamp Duty Land Tax (SDLT)

C

Capital Gains Tax: A tax on the profit when you sell an asset that has increased in value. It does not usually apply to your main home, but can apply when you sell a second home or rental property.; See also: Buy-to-let
Chain: A series of linked property sales and purchases where each transaction depends on another. If one link fails or is delayed, the whole chain can be affected.; See also: Exchange of contracts, Completion
Commonhold: A form of freehold ownership for flats where each owner owns their unit outright and is a member of an association that owns and manages the shared parts. It has no lease or landlord.; See also: Freehold, Leasehold, Tenure
Completion: The final stage of a purchase in England, Wales and Northern Ireland, when the money is transferred, ownership passes to the buyer and the keys are handed over. In Scotland the equivalent is the date of entry.; See also: Exchange of contracts, Date of entry
Conveyancing: The legal work involved in transferring ownership of property, carried out by a solicitor or licensed conveyancer. It includes searches, checking the title, handling enquiries and moving the money.; See also: Searches, Exchange of contracts, Completion
Council tax band: The band a home is placed in for council tax, based on its value at a historical valuation date. The band determines how much council tax you pay to your local authority.; See also: Material information

D

Date of entry: In Scotland, the date when the buyer pays the price, receives the keys and takes ownership. It is the Scottish equivalent of completion.; See also: Completion, Missives
Deposit: The part of the purchase price you pay from your own money, with the rest usually covered by a mortgage. For renters, a deposit is also a sum held as security against damage or unpaid rent.; See also: Loan-to-value (LTV), Tenancy deposit protection

E

Early repayment charge: A fee charged by a lender if you repay all or part of your mortgage early, typically during a fixed or discounted deal. It is often a percentage of the amount repaid.; See also: Redemption, Remortgage, Fixed-rate mortgage
EICR: An Electrical Installation Condition Report, which records the safety of a property's fixed wiring. Landlords in England must have one carried out at least every five years.; See also: Gas Safety Certificate, EPC
EPC: An Energy Performance Certificate rates a property's energy efficiency from A (most efficient) to G. One is needed when a home is sold or let, and it is valid for 10 years.; See also: Material information
Equity: The part of your property's value that you own outright, calculated as its market value minus any mortgage or loans secured on it.; See also: Negative equity, Loan-to-value (LTV)
Exchange of contracts: The point in England, Wales and Northern Ireland when buyer and seller swap signed contracts and the sale becomes legally binding. The buyer usually pays a deposit and a completion date is fixed.; See also: Completion, Conveyancing, Missives

F

First-time buyer: Someone who has never owned a residential property, in the UK or abroad. First-time buyers may qualify for tax relief and certain government schemes.; See also: Stamp Duty Land Tax (SDLT), Lifetime ISA, Shared ownership
Fixed-rate mortgage: A mortgage where the interest rate stays the same for a set period, often two or five years, so monthly payments are predictable. Afterwards it usually moves to the lender's standard variable rate.; See also: Standard variable rate (SVR), Tracker mortgage, Early repayment charge
Freehold: Outright ownership of a property and the land it stands on, with no time limit. Most houses in England and Wales are freehold.; See also: Leasehold, Share of freehold, Tenure

G

Gas Safety Certificate: A record, often called a CP12, showing that a Gas Safe registered engineer has checked the gas appliances, fittings and flues in a rental property. Landlords must arrange this every year.; See also: EICR
Gazumping: When a seller accepts a higher offer from another buyer after already accepting yours, before contracts are exchanged. It is legal in England, Wales and Northern Ireland but much rarer in Scotland.; See also: Gazundering, Sold subject to contract (STC)
Gazundering: When a buyer lowers their offer shortly before exchange of contracts, often putting pressure on the seller to accept or risk the sale falling through.; See also: Gazumping, Exchange of contracts
Ground rent: An annual payment from a leaseholder to the freeholder. Most new residential leases in England and Wales granted since June 2022 can only charge a peppercorn, effectively zero.; See also: Leasehold, Service charge
Guarantor: A person who agrees to pay a tenant's rent or a borrower's debt if they cannot. Guarantors are usually referenced and need a good credit history and sufficient income.; See also: Referencing

H

HMO: A house in multiple occupation, where three or more people from more than one household share facilities such as a kitchen or bathroom. Larger HMOs need a licence from the local council.; See also: Buy-to-let
Holding deposit: A payment to reserve a rental property while checks are carried out. In England it is capped at one week's rent and must normally be refunded or put towards the deposit or first rent.; See also: Tenancy deposit protection, Referencing
Home Report: A pack of documents that sellers in Scotland must provide before marketing a home. It contains a Single Survey with a valuation, an Energy Report and a Property Questionnaire.; See also: Survey, Offers over, EPC

I

Interest-only mortgage: A mortgage where monthly payments cover only the interest, so the original loan must be repaid in full at the end of the term. You need a credible plan to repay it.; See also: Repayment mortgage, Buy-to-let

L

LBTT: Land and Buildings Transaction Tax, the tax paid when buying property or land in Scotland. It replaces Stamp Duty Land Tax and is collected by Revenue Scotland.; See also: Stamp Duty Land Tax (SDLT), LTT, Additional Dwelling Supplement (ADS)
Lease extension: Adding years to a leasehold property's lease, usually by paying a premium to the freeholder. It becomes more expensive once a lease has fewer than around 80 years left.; See also: Leasehold, Marriage value
Leasehold: Owning a lease that gives you the right to live in a property for a fixed number of years, while the freeholder owns the building and land. Most flats in England and Wales are leasehold.; See also: Freehold, Ground rent, Service charge, Lease extension
Lifetime ISA: A savings account for people who open it aged 18 to 39, with a 25% government bonus on up to £4,000 a year. It can be used towards a first home costing £450,000 or less, or for retirement.; See also: First-time buyer, Deposit
Loan-to-value (LTV): The size of your mortgage as a percentage of the property's value. A lower LTV, meaning a bigger deposit, usually gives access to better interest rates.; See also: Deposit, Equity
LTT: Land Transaction Tax, the tax paid when buying property or land in Wales. It replaces Stamp Duty Land Tax and is collected by the Welsh Revenue Authority.; See also: Stamp Duty Land Tax (SDLT), LBTT

M

Marriage value: The extra value created when a lease is extended, part of which is currently added to the cost of extending a lease with fewer than 80 years left. Reforms in England and Wales are set to remove it.; See also: Lease extension, Leasehold
Material information: Facts a buyer or tenant needs to make an informed decision about a property, such as price, tenure, council tax band, utilities and known risks. Agents are expected to include it in listings.; See also: Tenure, Council tax band, EPC
Missives: Formal letters exchanged between solicitors in Scotland that set out the terms of a property sale. Once missives are concluded, the contract is legally binding.; See also: Date of entry, Exchange of contracts, Offers over
Mortgage offer: A formal offer from a lender to provide a mortgage on a specific property, issued after a full application, credit checks and a valuation. Offers are typically valid for a few months.; See also: Agreement in principle, Valuation

N

Negative equity: When the amount you owe on your mortgage is more than your property is worth. It can make it difficult to sell or remortgage.; See also: Equity, Loan-to-value (LTV)

O

Offers over: A common way of pricing homes in Scotland, giving the minimum price the seller hopes to achieve. Properties often sell above this figure when demand is high.; See also: Home Report, Missives

P

Periodic tenancy: A tenancy with no fixed end date that rolls on from one rental period to the next. Under the Renters' Rights Act, assured tenancies in England become periodic.; See also: Section 21

R

Redemption: Paying off a mortgage in full, for example when you sell or remortgage. The lender provides a redemption statement showing the exact amount due, including any fees.; See also: Early repayment charge, Remortgage
Referencing: Checks carried out on prospective tenants, typically covering identity, credit history, income and previous landlords. A common test is that annual income is around 30 times the monthly rent.; See also: Guarantor, Right to Rent
Remortgage: Switching your mortgage to a new deal, either with a different lender or the same one, without moving home. People often remortgage when a fixed or tracker deal ends.; See also: Standard variable rate (SVR), Early repayment charge
Rental yield: The annual rent from a property as a percentage of its value or purchase price. Gross yield ignores costs, while net yield deducts expenses such as fees, repairs and insurance.; See also: Buy-to-let
Repayment mortgage: A mortgage where each monthly payment covers both interest and part of the loan, so the debt is fully paid off by the end of the term.; See also: Interest-only mortgage
Right to Rent: The legal requirement in England for landlords to check that adult tenants have permission to live in the UK before the tenancy starts. It does not apply in Scotland, Wales or Northern Ireland.; See also: Referencing

S

Searches: Enquiries made by a conveyancer with local authorities and other bodies to check for issues affecting a property, such as planning, roads, drainage, flooding or contamination.; See also: Conveyancing
Section 21: A notice that allowed landlords in England to end an assured shorthold tenancy without giving a reason, often called a no-fault eviction. It is abolished under the Renters' Rights Act.; See also: Periodic tenancy
Section 24: The tax rule that stops individual landlords deducting mortgage interest from rental income. Instead they receive a tax credit at the basic rate of 20% of finance costs.; See also: Buy-to-let, Rental yield
Service charge: A regular payment by leaseholders towards maintaining, insuring and managing a building and its shared areas. It can vary from year to year.; See also: Leasehold, Ground rent
Share of freehold: An arrangement where leaseholders in a building jointly own the freehold, usually through a company. Each owner still has a lease but shares control of the building.; See also: Freehold, Leasehold, Commonhold
Shared ownership: A scheme where you buy a share of a home, typically between 10% and 75%, and pay rent on the rest. You can usually buy more shares over time.; See also: Staircasing, Leasehold, First-time buyer
Sold subject to contract (STC): A label showing that the seller has accepted an offer but contracts have not yet been exchanged, so the sale is not legally binding.; See also: Under offer, Exchange of contracts, Gazumping
Staircasing: Buying additional shares in a shared ownership home, which reduces the rent you pay. The price of each share is based on the property's value at the time.; See also: Shared ownership
Stamp Duty Land Tax (SDLT): The tax paid when buying property or land over a certain price in England and Northern Ireland. Rates depend on the price and on whether you are a first-time buyer or buying an additional property.; See also: LBTT, LTT, First-time buyer
Standard variable rate (SVR): A lender's default interest rate, which mortgages usually move onto when an introductory deal ends. It can change at any time and is often higher than other deals.; See also: Remortgage, Fixed-rate mortgage, Base rate
Survey: An independent inspection of a property's condition commissioned by the buyer. RICS Home Surveys come in three levels, from a basic condition report to a full building survey.; See also: Valuation, Home Report

T

Tenancy deposit protection: The legal requirement for landlords to protect a tenant's deposit in a government-backed scheme. In England and Wales this must be done within 30 days, with prescribed information given to the tenant.; See also: Deposit, Holding deposit
Tenure: The legal basis on which you own or occupy a property, such as freehold, leasehold or commonhold.; See also: Freehold, Leasehold, Commonhold, Share of freehold
Tracker mortgage: A variable-rate mortgage that follows the Bank of England base rate plus a set margin, so payments rise and fall when the base rate changes.; See also: Base rate, Fixed-rate mortgage

U

Under offer: A property where the seller has accepted an offer, but the sale has not yet completed. Some agents use it interchangeably with sold subject to contract.; See also: Sold subject to contract (STC)

V

Valuation: An assessment of a property's market value. A mortgage valuation is carried out for the lender to confirm the property is adequate security and is not a detailed survey.; See also: Survey, Mortgage offer