Selling Jargon Explained

A

Additional Person Fee

A charge for every additional person to be included in the tenancy agreement.

Advance

Mortgage Loan.

Approved in Principle / Agreement in Principle

A certificate some lenders will give you showing the amount they will probably be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.

ARLA

The Association of Residential Letting Agent, the UK’s foremost professional body for letting agents.

Arrears

Any late or unpaid rent.

Assured Shorthold Tenancy (AST) agreement

The standard tenancy agreement normally used for residential lettings.

Auction

The sale of a property to the highest bidder.

B

Balance Outstanding

The amount of loan owed at a particular time

Base Rate

The interest rate set by the Bank of England is known as the Base Rate. This can change at any time. [View Base Rate Changes]

Beneficiary

The individual(s) designated to receive the benefits from a policy.

Bridging Loan

A temporary loan advanced to help buy a new property before the existing one has been sold.

Buildings Insurance

Insurance against the cost of repair or rebuilding a property from scratch following structural damage, for example by flood, fire or storm.

Buy to Let

An investment where you buy a property – usually with a mortgage – and rent it out.

C

Cashback

Some lenders offer "cashback" on completion of your house purchase. This could be a fixed lump sum, or an agreed percentage of the mortgage loan. Remember to check whether there will be conditions attached.

Chain

A number of linked property sales where exchange of contracts must take place simultaneously.

Check out

The process of checking a property after a tenant has vacated. Normally only done when an inventory was carried out at the start of the tenancy. The condition of the property and the contents is checked against the inventory and the report is used as evidence for the settlement of the deposit.

Closing Date

The date set for submission of offers when more than one party show interest in the property.

Completion Date

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.

Conclusion

See under 'Subject to contracts exchanged'

Contents Insurance

Insurance against accidental damage or theft of all moveable contents, including furniture, appliances and soft furnishings.

Contract

A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale.

Conveyancer

Person other than and similar to a solicitor who may conduct the conveyancing.

Conveyancing

The legal work involved in buying and selling properties.

Council Tax

Levied by local councils to cover the cost of local amenities and services. 

Covenant

A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.

Critical Illness Cover

Pays out a lump sum if you are diagnosed with a specified critical illness.

Typical illnesses include:

  • Alzheimer’s Disease (before age 60)
  • Benign Brain Tumour
  • Blindness
  • Cancer
  • Coma
  • HIV - caught in the UK from a blood transfusion, physical assault or at work
  • Heart Attack
  • Kidney Failure
  • Loss of sight
  • Major Organ Transplant
  • Motor Neurone Disease
  • Multiple Sclerosis
  • Parkinson’s Disease
  • Stroke
  • Third Degree Burns
  • Total Permanent Disability

D

Deeds

Legal documents assigning ownership of a property and/or land.

Deferred period

A period of time that has to pass before benefit from a policy is claimed. Typically Income Protection policies will have a choice of deferred periods to suit any benefit you may be eligible for from your employer.

Deposit

Sum of money that represents the personal capital that the buyer is putting toward the purchase of the property.

Disbursements

Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor.

Discounted Variable Rate Mortgage

A set percentage discount below your lender's Standard Variable Rate for a predetermined length of time. Your monthly payments can still go up and down with this type of rate.

Draft Contract

Unconfirmed version of the contract.

E

Energy Performance Certificate (EPC)

All properties let for private residential purposes must have an EPC, unless the property is Grade II Listed, It is used to report the energy performance of a property.

Equity

The difference between the value of a property and the amount of mortgage owed.

Exchange of Contracts

The point at which the sale becomes legally binding from which neither party can withdraw without financial penalties - In Scotland see 'Missives Concluded'.

F

FIMBRA

Financial Intermediaries Managers & Brokers Regulatory Authority.

Financial Conduct Authority

The body that regulates the financial services industry in the UK.

Fixed Price

Offers are invited at the price shown

Fixed Term Tenancy

A tenancy with a specified start and end date.

Fixtures and Fittings

All non-structural items included in the purchase of a property.

Freehold

Ownership of the property and land upon which the property is situated.

Full Structural Survey

A full structural survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden.

Fully Managed

A service level offered to landlords. This is our comprehensive, hassle free service requiring minimum involvement from you. Whatever is required by you or the tenant, we take care of it.

Furnished

A property that is let with all furnishings a tenant would need to live comfortably.

Furnishings

The contents of the property included as part of the rent.

G

Gas Safety Check

Landlords are required to arrange of a gas safety check to take place annually on rented properties. This must be carried out by a gas safe registered engineer.

Gas Safety Record (GSR)

A document which shows that gas appliances (including a gas meter) has had an annual gas safety check carried out by a registered engineer. Landlords are legally required to have a GSR produced annually.

Gazumping

The practice by a seller accepting a higher price than that previously agreed with someone else.

Gazundering

The practice by a buyer lowering his offer just before exchange of contracts.

Ground rent

The annual fee which a leaseholder pays to a freeholder.

Guaranteed premium

Premiums will stay the same throughout the term of a policy.

Guarantor

Someone chosen to guarantee the payments of rent for the tenant should they fall into arrears.

H

Higher Lending Charge

Required by some lenders if your loan is for more than a required percentage of the value of the house. Although the borrower pays the premium, the policy protects the lender not the borrower.

Home Buyers Report

The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but does not involve in-depth investigation or the testing of water, drainage or heating systems.

House in Multiple Occupation (HMO)

A term applied to a property which has three or more tenants who are not a family unit.

Housing Association

A non-profit making body which lets you buy a percentage of the property and pay rent on the rest.

I

IFA

Independent Financial Advisor

IMRO

Investments Managers Regulatory Organisation. Regulates investment managers.

Income protection

Provides tax-free income in the event of you not being able to work due to ill health. Payments are usually paid monthly until you either return to work, the policy term expires, you retire or death occurs.

Instruction

When a seller instructs an estate agent to market a property.

Inventory

An inventory is conducted before the tenancy starts to provide an accurate list of the rental property’s contents and their condition.

J

Joint Agency

Where two estate agents work together to market a property.

L

Land Certificate

A Land Registry certificate proving ownership of property.

Land Registry

The Government organisation that holds records of all registered properties in England and Wales.

Landlord

A person who owns a property and allows a tenant to live there in exchange for monthly rent.

LAUTRO

Life Assurance Unit Trust Regulatory Organisation.

Leasehold

To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord. A leasehold is normally offered for either 999 years, 99 years or shorter terms.

Letting Agent

An agent who assists the landlord and tenant with the let. Service levels will vary and will be agreed between the landlord and the letting agent.

Level term assurance

A policy that pays a fixed lump sum upon death during the policy term.

Local Authority Search

An application made to the appropriate Local Authority requesting details of any planning or other matters which might affect the property being sold.

M

Maintenance Charge

A charge made towards the upkeep of a leasehold property.

Managing agent

A letting agent who manages the day to day running of the property on behalf of the landlord. The landlord remains legally responsible for the property and repairs but the agent works on the landlord’s behalf.

Missives Concluded

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.

Multi-Agency

The selection of two or more estate agents to act on the seller's behalf, usually incurring a higher fee than if the sale is completed by a sole agency.

N

Negative Equity

When the value of a property is less than the outstanding sum owed on a mortgage.

Non- Resident Landlord (NRL) scheme

The scheme that sets the rules for how overseas landlords pay tax.

Notice

A declaration given by either a landlord or tenant that the tenancy agreement is coming to an end.

O

Offer

A bid made by a prospective buyer, this is not legally binding.

Offers Over

Offers are invited above the price shown.

Ombudsman

Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.

P

Part-furnished

A property let with some furnishings, most properties will provide white goods. 

Part-possession

The term used when a property is being sold, where a tenant has legal right of occupation.

Portable appliance test

A test carried out on electrical appliances. The test is not legally required, although the landlord is responsible for ensuring any appliances provided are safe to use.

Portfolio

When a landlord lets more than one property, this is called a ‘portfolio’.

Premium

Premium Payments to the insurance company to purchase cover.

Premium protection

Covers the cost of policy premiums during periods of unemployment due to illness or injury. Also known as waiver of premium.

Private Treaty

The way in which most house sales are completed in England and Wales.

Property

Your home or the property you wish to sell or buy.

R

Reference

A process by which an applicant (ie. the tenant) is credit checked, as well as checks on their income and residence.

Rent

A fee (usually monthly) paid in exchange for accommodation.

Rent Collect

A service level offered to landlords. As well as finding you a tenant we’ll also take care of collecting monthly payments on your behalf; this leaves you to organise other tenant matters, the property maintenance and adherence to legislation.

Repayment Mortgage

Monthly interest combined with capital repayment against the original sum borrowed.

Repossession

When loans are in default the mortgage lender can repossess the property and sell it so they can repay the debt.

Reviewable premium

Premiums are very likely to change over the term of the policy, an insurer may choose to review premiums at set intervals such as every five years.

S

Sale Agreed

A verbal agreement from the seller.

Searches

Checks of local council records for planning applications and restrictions, etc.

Security Deposit

A sum of money taken from the tenant at the beginning of the tenancy held against non-payment of the rent and any damage to the property (above and beyond reasonable wear and tear).

Set up fee

A charge for setting up a new tenancy. The cost covers referencing the tenant, drafting the tenancy agreement and registering the deposit with a Tenancy Deposit Scheme.

Sole Agency

The choice of a single estate agent to act on the seller's behalf, incurring a lower fee than multi-agency.

Solicitor

Legal expert handling all documentation for the sale and purchase of a property.

Stamp Duty

A tax paid to the Government by the buyer upon completion.

Subject to Conclusion of Missives

Words used to indicate that an agreement is not yet legally binding.

Subject to Contract

Words used to indicate that an agreement is not yet legally binding.

Sum assured

The amount of money you are insured for from outset of a policy.

Survey

An inspection made by a qualified surveyor. There are three main types of survey. Valuation report (for mortgage purposes), Homebuyers report (also comments on general condition) and Full Structural survey (examines structural detail).

T

Tenancy Deposit Scheme (TDS)

A landlord is legally required to register the tenant’s security deposit in a Tenancy Deposit Scheme which protects the money for the tenant and will assist with any disputes at the end of the tenancy.

Tenant

A person who lives in a property owned by a landlord in exchange for a monthly rent.

Tenant Find

A service level offered to landlords. We find you a tenant and organise a tenancy agreement, leaving you with the day to day running of the let.

Tenants

People living in a property owned by someone else.

Tender

The process whereby the seller asks for written offers on a property usually with a set closing date.

Terminal illness benefit

The sum assured from a life assurance plan becomes payable if you are diagnosed with a terminal illness where life expectancy is considered to be less than 12 months.

The Property Ombudsmen

An independent body to which landlords can refer any complaint should the agent fail to address it to their satisfaction. We are founder TPO members.

Title

The ultimate record of ownership of a property, the evidence of which is found in the title deeds.

Transfer Deeds

The Land Registry document that transfers legal ownership from seller to buyer.

Trust

By placing the benefits of a policy “in trust” you can ensure that the correct person receives the proceeds. Assets owned in a trust do not form part of an estate of a deceased person.

U

Under Offer

When the seller has accepted an offer on the property but contracts have not yet been exchanged.

Underwriter

A person who assesses and classifies the degree of risk that a proposed insurance represents.

Unfurnished

A property let with no furnishings.

V

Variable Interest Rate

Rate of interest payment that fluctuates over time inline with general interest rates.

Vendor

The legal name sometimes used to describe the seller of the property.

Verbal Offer

Offer from prospective purchaser, not legally binding on either party.

W

Waiver of premium

Covers the cost of policy premiums during periods of unemployment due to illness or injury. Also known as Premium Protection

Writ

Mode of commencing legal proceedings.

Y

Yield

The amount of money a landlord receives from in rent as a proportion of the amount of money invested in the property.