Property Terms Explained.

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I Am The Agent's Quick Guide to Property Terminology




A document you sign and hand back to the mortgage lender to confirm you want to accept its offer.

Agreement in Principle (AIP)

A document from a mortgage lender that confirms it will lend you a certain amount based on your earnings and usually a credit search and credit score. An AIP will help prove to a seller you’re a serious buyer.

Annual Percentage Rate (APR)

Often misunderstood, an APR is the total percentage cost of the loan every year. So, that includes interest as well as any additional fees. APRs are a legal requirement when advertising financial deals like credit cards and mortgages.


An old-fashioned word meaning an estimate of a property’s current value according to an estate agent or surveyor.

Arrangement fee

A fee charged by some lenders to cover the administration of arranging a mortgage. They often apply to deals with special rates, such as fixes or trackers.


The amount of money that is overdue on your mortgage. If left unpaid it may result in the lender repossessing the property.

Asking price

The price a seller is hoping to achieve for their home


The transfer of a right, title or claim to a property from one party to another.

Assured Shorthold Tenancy (AST)

This common type of tenancy agreement gives a tenant the legal right to live in a rented home for a set amount of time.


Method of sale whereby a property is sold to the highest bidder. If the reserve price (the minimum the owner is willing to sell the property for) is not reached, then it remains unsold. Property auction beginners should do plenty of research.


Bank rate

Interest rate set by the Bank of England every month (also known as base rate or simply interest rate). If the rate you pay on your mortgage is variable, it may be affected if the bank rate changes.

Break clause

Sets out the earliest point at which a contract may be terminated (there still might be a notice period which starts ticking at this point).

Bridging loan

A high-interest temporary loan that offers short-term access to money, so you can buy a property before selling your existing home, for example.

Buildings insurance

An insurance policy that covers any structural damage to your property from events such as a fire or flooding. If you need a mortgage, building insurance will be a condition of the loan.

Building Survey

Formerly known as a structural survey, a Building Survey is a detailed report on the construction of a property. It’s the most comprehensive survey you can buy and is suitable for listed buildings, older or unusual homes or ones you intend to completely renovate.


Straightforward. The person who is buying a property (also known as the purchaser).

Buy-to-let mortgage

A mortgage designed specifically for buying a property that will be rented out, usually for investment purposes.


Capped rate

The highest interest rate or ‘cap’ you will pay on your mortgage for an agreed period – usually the first few years of the loan.


The amount of money put into either buying a property or paid as a deposit.


Most people need to sell their current home to be able to afford to buy the next one, and the people they sell it to, need to sell their home as well. This is what is meant by a ‘chain’ and if one link pulls out, the whole chain can collapse.


The ‘hold’ a lender has over the equity in your home. For example, if you owe £40,000 and fail to keep up repayments, you can be forced to sell your home to repay the debt.

Chartered surveyor

A surveyor, accredited by the Royal Institute of Chartered Surveyors (RICS), who is employed to carry out a survey on a property.

CML (Council of Mortgage Lenders)

The main trade body (but not regulator) that represents UK mortgage lenders. Members include banks and building societies. The CML promotes good practice, collects and publishes data about the mortgage market and liaises with the government.


The fee payable to an estate agent – typically a percentage of the property price.


Completion is when you’re in! The sale of the property is finalised and the legal transfer of ownership passes from one party to another.

Compulsory purchase order

Often referred to as a CPO, a compulsory purchase order allows local authorities to purchase property regardless of whether the owner wants to sell. However, the CPO must demonstrate how the purchase would benefit the public and adequately compensate the homeowner.

Conditions of sale

Terms defined in the contract which set down the rights and duties of both buyer and seller.

Condition Report

A clear ‘snapshot’ of the condition of your potential purchase. It’s the most basic level of survey you can buy and is suitable for new-build homes and properties in good condition.

Contents insurance

An insurance policy designed to cover any loss or damage to your possessions such as furniture, tech and appliances. It’s not essential but is often a good idea whether you own your home or rent.


This is the binding document both the buyer and seller sign to complete the sale or purchase of a property. It can also be known as an agreement.


Changing a property or room from one use to another. For example, converting a church into a home, converting a house into flats, or converting a loft into a bedroom.


The person who handles the legal and administrative process of transferring the ownership of a property from one party to another. They’ll need to be suitably qualified – such as a solicitor or property lawyer.


The name for all the legal work involved in transferring the ownership of a property from one party to another.


Legal requirement which you’ll find incorporated in the title deed (or lease) requiring the owner to do (or NOT to do) something in relation to the property.

Credit report

A record of a someone’s ongoing and repaid debts. Credit reports are held (but not determined) by a credit reference agency such as Experian or Equifax. It’s a clever idea to view a copy of yours before applying for credit so you can see what the lender sees ahead of time.


Declaration of trust

An agreement drawn up by the conveyancer sets down ‘who gets what’ if the property is sold or one owner buys out the other. It’s a good idea for cohabiting couples.


Legal documents proving ownership of a property or land. They may contain mortgages and leases, conveyances, contracts for sale and wills. They are also known as Title Deeds.



The money you’ll need to pay upfront when buying a home. Typically, an initial 10% is payable on exchange of contracts and the remainder is paid at completion.


Refers to a property that stands alone and has no shared walls with an adjoining property.


When a borrower fails to make the agreed payments. Usually this applies to a mortgage but can apply to any kind of loan.


Properties that have been newly built or have recently undergone a sizeable refurbishment.


Fees that are paid by the solicitor on behalf of the buyer. Ranges from stamp duty and local authority searches to money transfer fees.


The amount paid by the buyer to the seller on exchange of contracts to secure a property – usually 10% of the purchase price. Also known as a deposit.


A flat that is split over two floors.


Early Redemption Charge

Often abbreviated to ERC, this is the financial penalty you’ll be charged to terminate a mortgage deal early – for example, in year three of a five-year fix.


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.


Properties built between 1901 and 1910 during the reign of King Edward VII. Typical features include red brickwork, wooden doors with stained glass windows, elegant carved wooden porches, sash windows, dark wood floors, and decorative fireplaces.

End-of-terrace house

The last house in a row of similar houses that are joined together.

Endowment mortgage

An interest only mortgage that is combined with monthly payments into an endowment policy. The loan is paid off in a lump sum at the end of the term. Endowments have received bad press in recent years as many fell well short of their forecast value.

Energy Performance Certificate (EPC)

A certificate that details how efficiently a property uses energy with a ranking between A-G (with A being the most efficient). It will also provide an estimation of energy costs and offer suggestions on how to improve your efficiency. An EPC is legally required for properties being marketed for rent as well as for sale.


The definitive version of a document (usually a deed or statute) prepared by a solicitor.


The portion of the property value without a loan secured against it. It comprises any increase in the value of your home, as well as your deposit and the capital you have paid off the loan.

Equity release

A scheme which allows you to release some of the equity in your property through either a lifetime mortgage (where you borrow against a percentage but the loans not repaid until you die) or a home reversion plan (where you sell a percentage). Only available to those over 55 years old.

Estate agent

The person who advertises and arranges viewings of a property on behalf of the seller. Fees are usually charged as a percentage of the selling price, although online agents offer upfront packages.


The agreed fixed sum that you’ll have to stump up if you make a claim on an insurance policy. People often opt for higher excesses to reduce the monthly premiums.

Exchange (of contracts)

The point at which signed contracts confirming the intention to transfer ownership between buyer and seller are physically exchanged. At this stage the parties become legally-bound by the terms. You’ll have to pay the deposit (typically 10% of the purchase price) at this point and if you then pull out of the deal you will be forfeiting this money. 


First-time buyer

Usually refers to someone who is buying their first property. However, it can be used to describe someone who is buying a home without selling one.

Fixed rate mortgage

A mortgage deal that comes with an interest rate that’s 'fixed' for an initial defined period, typically for two, three or five years.

Fixtures and fittings

The non-structural items in a property that should be listed as included in a sale. Although there may be negotiations as to what this includes.


A drawing that helps establish the dimensions of a property (although it may not be done to scale).

Flying freehold

When part of a freehold property protrudes into another freehold property or land, such as a covered walkway between two tower blocks.


If you own the freehold, you own the building and the land that it stands on outright indefinitely.

Further advance

Extra money provided by a lender to a borrower and secured on the property as part of the mortgage debt. This may or may not be at the same interest rate.



When a seller has agreed an offer in principle on a property but later accepts a higher offer from another party.


Where the buyer has made an offer that has been accepted but then subsequently reduces the offer just before exchanging contracts.



Homes built between 1714 and 1830 during the reigns of King George (I to IV). Typical features include stucco fronts, tall sash windows and ceilings with decorative plasterwork.

Ground rent

An annual fee paid by the leaseholder to the freeholder of the property. Often between £50 and £200 a year.


Special mortgages require borrowers to appoint someone who will be responsible for their debt should they fail to pay. In some cases, tenants may also appoint a guarantor, so the landlord can be assured of receiving rent.


HomeBuyer Report

A report carried out by a surveyor on behalf of a buyer to assess the value and condition of a property and highlight any major defects. It is a more comprehensive survey than a Condition Report, but not as extensive as a Building Survey. The HomeBuyer Report is suitable for most modern and older homes in a reasonable condition.

Houses in Multiple Occupation (HMO)

If a home has at least three tenants which form more than one household and the toilet, bathroom or kitchen facilities are shared, it’s classed as a HMO. Landlords of HMO’s have extra responsibilities, such as ensuring there are enough bins. Examples include a house split into separate bedsits, hostels and shared accommodation for students.



Improvement grant

A grant given by a local authority towards the cost of repairing or improving a property.

Independent Financial Adviser (IFA)

Looking for help with your finances? An independent financial adviser offers unbiased and unrestricted advice from the whole of the market. They’ll also have to tell you upfront how they charge.

Individual Savings Account (ISA)

The interest paid on cash ISAs is free from tax, so you keep all the interest earned. You can save a set amount into an ISA every year (which runs April 6 to April 5). See Personal Savings Allowance for more on tax-free savings.


When a property owner asks an estate agent to market their property for sale.


That unavoidable part of a mortgage or loan. Expressed as a monthly fee or annually (see APR), it is the fee charged by a lender on the borrower as compensation for the loss of the asset (usually either cash or consumer good). Interest is calculated as a percentage of the amount borrowed or the amount outstanding.

Interest-only mortgage

Mortgage where only the monthly interest charges are repaid initially. The mortgage amount itself i.e. the ‘capital’ is not paid off. The full mortgage must be repaid at the end of the term, though often through an ISA, endowment policy or pension plan. This type of mortgage has become more difficult to obtain since the Mortgage Market Review in 2014. 


Joint Agents

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

Joint Tenants/ joint tenancy

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



Land Registry

The 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.

Land Registry fees

Set fee paid to Land Registry to register ownership of a property.


A person, group of people or a company that lets out their property to tenants.

Lease agreement

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


Ownership and right to occupy a property by way of a lease agreement for a given period of time, usually subject to an annual payment of rent to the owner of the freehold. Leases are normally long term, often ranging from between 90 years and 999 years. Short leases are unattractive to mortgage lenders, with anything lower than 60 years likely to be difficult to mortgage.


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

Lender's legal fees

Fees incurred by the lender in arranging a mortgage that are passed on to the borrower.


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


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

Listed building

Building that has been registered as being of special interest and has preservation orders on it. Listed buildings cannot normally be altered or extended without permission from the local government.

Loan-to-value (LTV)

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

Local authority search

Checks carried out by the solicitor with the local council regarding any future development issues that might affect a property and/or the surrounding area.  


Maintenance Charge

Charge to a tenant or leaseholder made by a landlord to cover costs of maintaining a property. Depending on the property, this can include keeping the communal such as hallways and garden well maintained. Also known as a service charge.


A property that is part of a larger building but has its own private entrance. Can either be on one floor or split-level.


Long-term loan obtained from a bank or building society which is used to fund the purchase of a property where the property is held as security. You will need to prove an income and a good credit score.

Mortgage Deed

Document containing the terms and conditions of a loan secured on a property.

Mortgage Indemnity Guarantee (MIG)

Fee levied by some lenders to protect them against the borrower defaulting. They are very rarely charged now.

Mortgage Term

The period over which a mortgage will be repaid. Traditionally this was 25 years, but depending on age this can go up to 30.

Mortgage Valuation

Report commissioned by the lender to assess property value and determine the maximum amount to be loaned on the property. Not to be confused with a survey.

Multiple Agency

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.



Negative Equity

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

NHBC (National House Building Council) Scheme

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

Online Estate Agent 

An online estate agent is a technology driven estate agent. Allowing for properties to be marketed online. I am The Agent is one of the first truly online estate agencies, we were launched in 2009. 


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.

Open Market Value

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



Stands for Per Calendar Month. Typically, how rent is charged.


Literally translates to ‘foot on the ground’ but normally refers to property that is kept for temporary or occasional occupation. They are often used for part of the working week or year as a secondary residence.

Preliminary Enquiries

Initial set of questions from the buyer’s solicitor regarding a property that must be answered by the seller prior to exchange of contracts.


Amount payable on an insurance policy, usually paid monthly.


When the owner of a property dies and leaves the property in their will, probate is the official process for proving the will is valid. For inheritance tax purposes the property may need to be valued and this is typically carried out by the district valuer who represents the Inland Revenue. Contracts cannot be exchanged on a property until probate has been granted.


The person (or people) buying a property. Also known as the buyer.



Completion of the full and final repayment of a mortgage.

Redemption Figure

Amount required to fully repay a mortgage including interest and any penalties. This may incorporate an early redemption charge.


Can be a requirement for landlords and lenders seeking to make sure a prospective tenant or borrower is a suitable match. This can include doing a credit check, contacting their employer and getting in touch with past landlords.

Repayment Mortgage

Mortgage with monthly repayments consisting of capital (the amount you borrowed) combined with interest. It has become the most common type of mortgage since the Mortgage Market Review was introduced in 2014.


If you fall behind in your mortgage repayments the lender can take possession of the property that secures the loan. If you live in your property you will be evicted.

Return On Investment (ROI)

The amount you get back in comparison to the amount you put into an investment.

Residential Property

Property occupied for private or domestic purposes.

Right to Buy

A government scheme that allows eligible council tenants in England to buy their home at a discounted price.



Your solicitor will make enquiries to the local authority and Land Registry to ensure there aren’t any matters that will adversely affect the property or the surrounding area. Searches typically cost between £250 and £300 and will often be included in the overall solicitor’s fee.


Property used to secure the mortgage loan.


The process of building your own home. If you are a builder then this can be taken literally, but for most people this involves choosing builders, architects and surveyors to undertake the work.


The person who is selling the property. Also known as the vendor.


A type of property where one side wall is shared with an adjoining property.

Service charge

Charge to a tenant or leaseholder made by a landlord to cover costs of maintaining a property. Usually pays for the upkeep of communal areas such as gardens and hallways. Also known as Maintenance Charge.

Share of freehold

If you are buying a flat with a share of the freehold, you become part of the group of people or company that make decisions and organise the maintenance of the building. You will still have to follow the terms of your lease though.

Shared ownership

The option to buy a share of a property (between 25% and 75%) from a UK housing association. You’ll then pay an ‘affordable rent’ on the share of the property you don’t own.

Sole agency

Where a seller instructs one agent exclusively to market their property.

Sole Selling Rights

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


A professionally qualified legal expert who will prepare the documents on behalf of the buyer or seller throughout the process of purchasing a property. Responsibilities include conducting searches, collecting funds and arranging and overseeing the exchanging and completion of contracts.

Stamp Duty Land Tax (SDLT)

The tax paid to the government by a buyer on the purchase of a property.

Standard Variable Rate (SVR) Mortgage

A type of mortgage where interest rates vary at the discretion of the lender based on market conditions. If you have a mortgage deal with a discount rate, at the end of the discounted period it will revert to a standard variable rate.  

Structural survey

See building survey – the new name for a structural survey.

Studio flat/apartment

A flat with just one principle living area containing both cooking and sleeping facilities with a separate bathroom or shower room.

Subject to contract

A provisional agreement prior to exchange of contracts that is not yet legally binding, so either party can still pull out of the transaction.


Report on the condition of a property.


Qualified expert who carries out the survey of a property. 



Person (or entity) who is entitled to occupy a property under the terms of a Tenancy Agreement.

Tenancy agreement

Legal document detailing terms whereby the owner of a property grants rights to another party to occupy it for a specified period. The most common type of agreement is an Assured Shorthold Tenancy.

Tenants in common

An optional method of shared home ownership (not necessarily in equal shares). If an owner dies, the owner's stake in the property is passed to their 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.


Property where both side walls are shared with adjoining properties.

Title deeds

Documents showing the legal rights to ownership of a property.

Tracker mortgage

A tracker mortgage usually follows the Bank of England base rate. As a result, your mortgage repayments can go up or down.


Under offer

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


Refers to services such as gas, electricity, water, sewage and broadband.


Vacant possession

A property that has been vacated by any previous occupants upon the completion of the purchase.


Survey conducted by a qualified professional such as a Chartered Surveyor to establish an estimate of the current market value of a property.


Person who is selling a property. They may also be known as the seller.


Homes built between 1837 and 1901 during the reign of Queen Victoria. They are one of the most common types of period property in the country because of the industrial revolution. Typical features including red brick façades, bay windows and fireplaces with cast iron hearths.


The income generated from a rental property stated as a percentage of the property value. For example, if a property was bought for £100,000 and rented for £600 per calendar month, the annual yield would be 7.20%