Glossary

Monies provided by a lender to a borrower and secured on the property as part of the mortgage debt.

Document outlining the terms agreed between the buyer and the seller and binding both parties to complete the sale/purchase transaction. Also known as Contract.

Lender’s expression of intent to provide funding subject to certain conditions being met. Also known as Mortgage Agreement in Principle (MAP).

Fee charged by some lenders to cover the administration of arranging a loan.

Price set by the seller of a property as what they hope to achieve.

Method of sale whereby a property is sold to the highest bidder.

Interest rate set by the Bank of England. Variable mortgage rates will often be adjusted depending on movements in the Base Rate.

Insurance policy required by lenders and designed to cover any structural damage to a property.

Mortgage designed for buying property that is intended to be rented to tenants for investment purposes.

Amount borrowed on which interest is calculated.

Occurs where successive buyers and sellers are linked together and reliant upon one another to complete the transaction.

Security in the property relied upon by lenders when granting a mortgage.

Fee payable to an estate agent, usually a percentage of the property price, for providing certain services in relation to the transaction.

Point at which legal transfer of property ownership passes from one party to another.

Terms defined in the contract and which determine the rights and duties of the buyer and seller.

Document outlining the terms agreed between the buyer and the seller and binding both parties to complete the sale/purchase transaction. Also known as Agreement.

Occurs when two or more parties attempt to purchase the same property and the Vendor will sell to the first party to exchange contracts.

Suitably qualified person, such as a solicitor or licensed conveyancer, who handles the legal and administrative process of transferring ownership of a property from one person to another.

Legal requirement incorporated in the Title requiring the owner to do, or not to do, something in relation to the property.

Legal documents proving ownership of a property. Also known as Title Deeds.

Amount of money paid by the buyer to the seller on exchange of contracts in order to secure a property. Also known as Down Payment.

Third-party costs relating to transactions paid out by solicitor to cover items such as Stamp Duty, Land Registry, Local Authorities, etc.

Termination of a mortgage obligation when no further payments are required.

Early version of the contract, which is then edited by the acting solicitors.

Financial penalty charged by some lenders if the borrower terminates a mortgage early.

Right granted to someone other than the owner of a property such as a right of way over land or a right to maintain services under land.

Final copy of a document prepared by a solicitor for signing by the parties.

Owner’s financial interest in a property, calculated as the difference between the market value of a property and the balance outstanding on the mortgage.

Point at which signed contracts confirming the intention to transfer ownership between buyer and seller are physically exchanged and the parties become legally bound by the terms.

Buyers who have not previously purchased a property.

Mortgage with interest rates initially ‘fixed’ for a defined period.

Those non-structural items in a property that should be listed to be included in a sale

Where part of a freehold property overhangs a different freehold property or land.

Absolute ownership of both a property and the land on which it stands indefinitely.

Where the seller has agreed an offer in principle on a property but then subsequently accepts a higher offer from another party.

Where the buyer has made an offer that has been accepted but then subsequently reduces the offer immediately prior to exchange of contracts.

Fee paid annually by the leaseholder to the freeholder in order to occupy the land on which a property stands.

Person responsible for repaying a debt if the borrower defaults as required by some lenders.

Standard report conducted by a surveyor on behalf of a buyer to assess value and condition of a property, highlighting major defects.

Statistical method of representing changes in house prices over time.

Qualified person using specialised knowledge of the marketplace to select financial products to best suit the needs of their client.

Mortgage designed for monthly repayments to be paid into an Individual Savings Account, which is used to pay off the loan at the end of the term.

Protection against a specific loss over a period of time secured by payment of a regular premium.

Fee charged by a lender on the borrower, calculated as a percentage of the amount borrowed.

Mortgage where only the interest charges are repaid initially. Monthly installments are invested by the buyer and repaid in full at the end of the term.

Two estate agents jointly instructed by a seller to market a property.

Equal holding of a property between two or more persons. If one party dies, their share passes to the survivor(s).

Government department responsible for recording ownership of land in England and Wales. Searches will be requested from the Land Registry by conveyancers as part of any property transaction.

Possession of a property owned by another party for a specified time period. Also known as Tenancy.

Legal document detailing terms whereby the owner of a property grants rights to another party to occupy it for a specified period of time. Also known as Tenancy Agreement.

Ownership and right to occupy a property by way of a lease agreement for a given period of time subject to an annual payment of rent to the owner of the freehold.

Institution that lends funds in order to assist the borrower with a property purchase.

Someone who holds the lease on a property. Also known as Tenant.

Someone who grants a Lease on a property. Also known as Landlord.

Legal right or claim against a property as security for a debt.

Building that has been registered as being of special interest and has preservation orders on it.

Percentage indicating the ratio of a mortgage loan on a property to its market value.

Charge to a tenant or leaseholder made by a landlord to cover costs of maintaining a property. Also known as Service Charge.

Property that comprises a portion of a larger building, usually arranged over more than one floor with its own private entrance.

Long-term loan used to fund the purchase of a property where the property is held as security.

A document that states that you and the lender have agreed to use the property as a security to protect the mortgage. The Deed contains information on the conditions of the mortgage, repayment schedule, length of the mortgage, mortgage rates, type of mortgage and security for the mortgage.

The lender of a mortgage.

Fee charged by some lenders to protect them against the borrower defaulting. Also known as Mortgage Indemnity Premium (MIP) and Additional Security Fee.

Fee charged by some lenders to protect them against the borrower defaulting. Also known as Mortgage Indemnity Guarantee (MIG) and Additional Security Fee.

Standard variable interest rate quoted by all mortgage lenders. This varies in accordance with the Bank of England base rate.

Period of time over which a mortgage will be repaid.

Report commissioned by the lender to assess property value and determine maximum amount to be loaned on the security of a property.

The borrower of a mortgage.

Where two or more estate agents are instructed by a seller to market a property. Only the agent who introduces a successful purchaser is paid.

Occurs when the market value of a property falls to a value less than the mortgage loan balance.

A guarantee offered on some newly built homes for structural defects occurring within a specified time after construction.

Indication from a potential buyer of a willingness to purchase a property at an indicated price. An offer is not legally binding in England and Wales and can be withdrawn or changed at any time prior to exchange of contracts.

Independent body responsible for the investigation of complaints on behalf of consumers. Also known as The Property Ombudsman.

Price that a property would likely achieve if it were available for sale.

Nominal ground rent usually paid annually and of trivial amount.

Initial set of questions regarding a property that the seller must answer prior to exchange of contracts.

Insurance to cover the injury or death or damage to property of anyone on or around your property.

Person who is buying a property. Also known as the Buyer.

Completion of the full and final repayment of a mortgage.

Amount required to fully repay a mortgage including interest and any penalties.

Mortgage with monthly repayments consisting of capital combined with interest.

Occurs when mortgage payments are in arrears and a lender chooses to take possession of the property that secures the loan.

Amount held back by a lender until certain specified works have been completed.

Legal agreement between a seller and an estate agent.

Enquiries made to the local authority and Land Registry for determining whether any matters adversely affect the property or the surrounding area.

Property used to secure the mortgage loan.

Charge to a tenant or leaseholder made by a landlord to cover costs of maintaining a property. Also known as Maintenance Charge.

Where only one estate agent is instructed exclusively by a seller to market a property.

Where one estate agent has exclusive rights to market a property and is entitled to a fee irrespective of how the property is sold.

Mortgage with interest rates that fluctuate at the discretion of the lender based on market conditions.

Term used to indicate a provisional agreement prior to exchange of contracts that is not yet legally binding

Possession of a property owned by another party for a specified time period.

Legal document detailing terms whereby the owner of a property grants rights to another party to occupy it for a specified period of time. Also known as Lease Agreement.

An optional method of shared home ownership (not necessarily in equal shares). If an owner dies, the owner’s interest in the property is passed to the owner’s heirs, rather than to the other owners of the property.

Conditions on which a property is held, i.e. whether it is freehold or leasehold.

Legal right to ownership of a property.

Status of a property from the point at which a seller has accepted an offer until exchange of contracts.

Provision of a property that has been vacated by any previous occupants.

Basic rate of interest charged on a mortgage that may change due to market conditions.

Person who is selling a property. Also known as the Seller.

Income generated from a property expressed as a percentage of the property value.