Glossary

A

Abstract of Title

A schedule listing the documents which set out the history of ownership of a property.

Acquisition

The completion date of contracts to purchase land or property.

Acting for both sides

The same firm is used by the seller and buyer which usually speeds up the transaction. The same conveyancer cannot act for both, but a different conveyancer in the same firm can act for the other party.

Adopted Highway

A road maintained by the local authority.

Advance

The payment of mortgage monies by the lender.

Affordable Home Ownership

A general term used to describe the various types of funding home ownership with subsidy, such as the different forms of HomeBuy and Right to Acquire.

Agents

Responsible for the buying, selling and letting of property. More commonly known as Estate Agents.

Agreement

Often used as a word for contract.

APR

Annual Percentage Rate. A yardstick to help compare interest rates among lenders. It takes into account extra items such as booking fees.

APRC

Annual Percentage Rate of Charge, total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit, including interest and other charges applying.

Assent

The formal document required to transfer ownership of a property to a person entitled following the death of the owner.

Assignment

The transfer of a lease.

Assured Shorthold Tenancy (AST)

A special form of tenancy agreement designed to simplify the process of obtaining vacant possession of the property at the end of the agreed tenancy period.

Auction

The sale of a property to the highest bidder.

B

Balance Outstanding

The amount of loan owed at a particular time.

Bankruptcy Search

A search of the Land Charges Register to see if any bankruptcy proceedings are pending or established against a person.

Base Rate

The basic rate of interest upon which other interest rates are based.

Basic fee

The fee charged by the solicitor for their time and skills. This is most often calculated as a percentage of the property’s sale price, although it can also be calculated as a fixed-fee or on a per-hour basis.

Boundaries

Boundaries define the extent of the property in question and are usually marked with fencing, hedging or walls. They are usually shown explicitly on the deeds plan.

Breach of Contract

Once contracts have been exchanged, if either party pulls out and does not complete the conveyancing process they are in breach of contract and the non-defaulting party can legally seek reparations.

Brine Search

A search to establish if a property might be affected as a result of salt workings near the property.

Brownfield

A piece of land which has been previously developed for a use other than agriculture or forestry and which has one or more permanent structures on it. These sites can be in urban and rural areas and examples include industrial sites, defense buildings and land used for mineral extraction and waste disposal.

Building Regulation Consent

Approval by the local authority on the design, structure and materials used in building work.

Buildings insurance

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

Business Expansion Scheme (BES)

A tax efficient vehicle used for funding housing and other types of business. No longer available.

Buyer

Someone who buys a property.

C

Capped Rate

A mortgage interest rate which is a variable rate but capped at a maximum upper limit usually for a limited period.

Cashback

A sum of money usually paid by the lender on completion of a mortgage.

Caveat Emptor

This literally translates to ‘let the buyer beware’ and means the buyer is responsible for finding out the condition of a property using a surveyor.

Chain

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

Charge

A debt secured on the property. Monies borrowed from a building society for the purchase of a house are usually secured against the property.

Chattels

Items of personal property left over at a house and included in the purchase price, such as furniture. These are described on the Fixtures, Fittings and Contents form.

Client care letter

Conveyancers will send a client care letter for you to sign and return. This is a formal contract and should be read thoroughly. It will detail what services will be provided and a breakdown of the cost, in addition to the Conveyancers complaints procedure.

Closing Date

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

Coal mining search

If the property is situated in a coal mining area this search will be conducted by the property lawyer to find out if coal mining activities will affect the property in the future.

Collateral

Security pledged for repayment of a loan.

Commission for Architecture and the Built Environment (CABE)

Organisation which aims to improve peoples' lives through better buildings, spaces and places. CABE promotes high standards in the design of buildings and spaces between them, helping and advising those who create, manage and use the built environment.

Commons Registration Search

A search at the local authority to check the property is not registered as common land or part of a village green which may therefore mean there are third party rights over the property (e.g. grazing) resulting in the enjoyment of the property being limited.

Completion

The moment when the buyer becomes the new owner of the seller's house and the seller must have left 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.

Completion Statement

A written calculation of all the receipts and payments due in respect of the transaction.

Compulsory Purchase Order (CPO)

A legal function to allow property to be compulsorily purchased by a public body.

Condition of sale

A legal term of the contract governing the purchase.

Conservation area

If the property to be bought lies in a conservation area protected by a local authority, it may be subject to exterior planning restrictions to preserve the look of the area.

Contaminated Land

Land affected by contamination which could arise from a past use of a property (e.g. oil refinery) or by things stored on the property in the past (e.g. petrol station).

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.

Conveyance

A common name for the legal document that officially confirms the sale or purchase of a property or piece of land. Nowadays the transfer is conducted using a Transfer deed / document although in some cases a conveyance may be used.

Conveyancer

Person other than a solicitor who may conduct the conveyancing.

Conveyancing

The legal work involved in buying and selling properties.

Cost Floor

In the context of the Right To Buy, those costs in respect of the Dwelling, which are treated as incurred after 31 March 1974 and relevant in accordance with the Secretary of State's Determinations made under Section 131 of the Housing Act 1985 as amended by Section 122 of the Housing Act 1988. In cases where the Landlord's notice under Section 125 of the 1985 Act is issued after 9 March 1989, the Secretary of State's Determination made in March 1989 shall apply.

Council for Licensed Conveyancers (CLC)

The governing body that licenses and regulates conveyancers. You should always ensure your conveyancer is a full member.

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.

Creditor

Someone who is owed money.

D

Deed of covenant

A document stating that someone will comply with the rules and conditions affecting a property.

Deed of Gift

A document transferring the ownership of property from one person to another without any payment being made for it.

Deed of Guarantee

A document used where one person agrees to be responsible for someone else's debt or mortgage obligations if that person fails to carry out their own obligations.

Deed of Postponement or Priority

Where a mortgagee agrees to their mortgage ranking after another lender's mortgage.

Deed of Variation

A deed which changes the terms of a lease or other document.

Deeds

Legal documents assigning ownership of a property and/or land. Official documentation outlining the owner of a property which is in possession of the owner or mortgagees in the event the property is mortgaged.

Deposit

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

Deposit

The agreed amount to be paid on exchange of contracts usually forfeited if the buyer fails to complete.

Disabled Facilities Grant (DFG)

Government funding to local housing authorities to provide and improve adaptation services to disabled people enabling them to continue to stay in their own homes.

Disbursements

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

Disbursements

Disbursements are fixed costs incurred by a conveyancing provider undertaking the conveyancing process on your behalf, which are then passed on to you. Examples include local authority and bankruptcy searches.

Discount Rate

A mortgage interest rate which will rise and fall with the variable rate but which will always be the discounted amount below the variable rate.

DIY Conveyancing

Most people appoint a solicitor or conveyancer when buying or selling a property but some choose to undertake the process themselves. This can be very risky in some cases, such as when dealing with leasehold properties.

Draft Contract

Unconfirmed version of the contract.

Drainage search

A check carried out during the conveyancing process that ensures a property is connected to both fresh and foul water sewers.

Dwelling

This is defined in section 275 of the Housing and Regeneration Act 2008 as a building, or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it.

E

Early Repayment Charge (ERC)

A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.

Easement

A right granted over another’s property (such as a right of way).

Encumbrance

A (usually unfavourable) feature affecting a property.

Endowment Mortgage

A mortgage where you pay the interest on the mortgage only and a premium towards an endowment policy. The policy is then intended to pay off the original amount borrowed at the end of the mortgage term.

Energy Performance Certificate (EPC)

An EPC or Energy Performance Certificate provides an energy performance rating for a building.

Engrossment

A final version of a document to be signed by all relevant parties.

Environmental Search

A search against a property to check whether there is any record kept to suggest that the property may be affected by contamination or other environmental issues.

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'.

Existing Satisfactory Purchase (ESP)

A form of acquisition for rent using grant where little or no repair, replacement or improvement work (i.e. approximately £1,500 or less) is required to provide suitable housing.

F

First Time Buyer

A buyer who has not previously purchased a property.

Fixed Price

Offers are invited at the price shown.

Fixed Rate Mortgage (FRM)

A mortgage interest rate where the mortgagee agrees to charge a fixed rate of interest over a given period whether or not the variable rate changes.

Fixtures and Fittings

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

Fixtures Fittings & Contents Form

A standard form where the seller sets out all those items in the property which they have agreed to leave as part of the sale price and which is attached to and forms part of the contract.

Flexible Home Ownership

Housing sold on a part rent/part sale basis. The shared owner buys a percentage of the property, funded by a mortgage and/or savings. The remaining percentage is still owned by the developing organisation who charges rent on it. Under the MHC 15-18, Flexible Home Ownership is also the brand name for this tenure, replacing New Build HomeBuy (please see definition above) and Shared Ownership. Please see also entries for Protected Areas, Protected Areas Repurchase and Rural Housing.

Flying/Creeping Freehold

This arises when part of one property is built on top of part of another property and so the upper property owner does not own the building or land underneath the "flying" part. Consequently the lower property is known as the "creeping" part.

Freehold

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

Freeholder

The person who owns the freehold title.

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.

Full Title Guarantee

An assurance by the owner of unfettered ownership.

Further Advance

An additional amount lent to the mortgagor under the terms of the original mortgage.

G

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.

Grant Agreement

Contract between the GLA and providers delivering a programme in the Affordable Homes Programme 2016-21 or a successor programme.

Ground rent

The annual fee which a leaseholder pays to a freeholder.

Guarantor

A person who guarantees to pay rent or mortgage payments should the tenant fail to do so and to take legal and financial responsibility for any damage which may occur to the property.

H

High Loan to Value Fee

This is sometimes charged by a mortgagee where a borrower borrows more than a certain percentage of the value of a property to insure the mortgagee only against loss arising if the property is sold by them due to the borrower's failure to pay the mortgage.

HM Land Registry

The government body that deals with ownership of property and land throughout England and Wales, but not Scotland and Northern Ireland.

HomeBuy

Since April 2006, HomeBuy is the generic name for a suite of Affordable Home Ownership products (Shared ownership, Equity Loans, New Build HomeBuy, Social HomeBuy Open Market HomeBuy, and HomeBuy Direct) designed to help social tenants and others in priority need purchase a suitable home. These products were launched within the NAHP for 2006-08, with HomeBuy Direct being available from February 2009.

There have been various other products named Homebuy available prior to April 2006. The forms of Homebuy that were in operation before April 2006 are referred to with a capital H and lowercase b (Homebuy), whilst versions of HomeBuy in operation since April 2006 use a capital H and a capital B – as in HomeBuy. A small but important change!

Housing Association

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

Housing Benefit (HB)

A government benefit which pays all or part of the rent and service charge for a property.

I

IFA

Independent Financial Advisor.

Indemnity Insurance Policy

A policy taken out to protect the owner against problems caused by a defect in the legal title.

Index Map

A search at Land Registry of the Index Map can be made to establish if a property is registered or unregistered.

Instruction

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

Interest Only Mortgage

A mortgage whereby interest only is paid to the mortgagee and the capital amount of the original loan is repaid at the end of the mortgage term either by an endowment policy maturing or a pension or other savings plan maturing.

J

Joint Mortgage

A mortgage where there is more than one individual named responsible for the mortgage.

L

Land Certificate

A Land Registry certificate proving ownership of property.

Land Charges Search

If a property is unregistered a search at the land charges registry is made to see if a person has any bankruptcy proceedings pending or established or to see if there are any mortgages or interests registered which affect the property.

Land Registry

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

Land Registry Fee

The fee payable to the Land Registry to register any change affecting the property including a change of ownership.

Land Registry Search

A search at the land registry to check that no undisclosed charges or interests are registered against the property.

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.

Lender

A person or company that lends money for an agreed time period. They expect to have the money repaid with interest added. A mortgage company is an example of a lender.

Lender's Arrangement Fee

A charge made by the lender to the buyer for arranging the loan.

Limited Title Guarantee

This is the title guarantee given by a seller where because of their limited knowledge of the property the full title guarantee cannot be given (e.g. a personal representative of a deceased owner or a mortgagee in possession).

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.

Mining Search

A search to check whether the property may be affected by coal mining activity which may result in subsidence.

Missives Concluded

Scotland only. The solicitors must agree on the written negotiations of the sale - the 'missives'. This can only be done once a mortgage offer is received. When the missives are agreed, this is known as 'conclusion of missives'. Both parties are now legally bound to the sale/purchase.

Mortgage

A loan secured against a property. In the event of non-payment, there is usually a right to sell the property.

Mortgage Deed

A legal document relating to the mortgage lenders interest in the property.

Mortgage Offer

A formal written offer made by a bank or building society to lend an approved amount to purchase a property.

Mortgage Term

The length of time agreed for the repayment of the loan.

Mortgaged

Where a property has been charged by the owner or mortgagor to the mortgagee.

Mortgagee

A money lender, such as a building society or bank, who secures the loan against a property.

Mortgagor

Somebody who takes out a mortgage (a borrower).

N

Negative Equity

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

Negative Equity

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

NHBC

National House Builders Council. The NHBC provide a ten year guarantee for new properties.

O

Occupier’s consent

Required when a person lives at a property but will not be signing the mortgage deed. Consent is asked to allow the mortgage being taken out by the owner, agreeing to move out if the mortgagee takes possession due to the default of the mortgage.

Off-Plan

When a property is bought before the building work has begun, or has been completed.

Offer

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

Offers Over

Offers are invited above the price shown.

Office Copy Entries

The legally permissible document outlining who owns your property, held by HM Land Registry. It is requested by your conveyancing provider during the conveyancing process.

Ombudsman

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

P

Part-possession

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

Party Wall

A wall owned jointly with a neighbour and repairable at shared expense.

Planning Permission

Approval by the local authority to the building or change of use of a property or extension to an existing property.

Pre- contract enquiries

Enquiries made by the buyer’s solicitor about the property being sold.

Pre-completion searches

These are searches undertaken by your conveyancing provider before contracts are exchanged. They check to see if you have been bankrupt and that the property in question is legally owned by the seller. Also known as priority searches.

Private Road

A road maintained by property owners rather than by the local authority. The property owners need to have rights over it as it is not necessarily a public access.

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.

Property Information Form

Sellers are required to fill this form in and return it to their conveyancing provider. It asks questions regarding boundaries, disputes, services, relationships with neighbours, legal rights, restrictions and other important information. Failure to provide correct information is an offence; in cases where you’re unsure your solicitor should be able to help.

Property Information Form

A document completed by a seller to give information about the property to the buyer (e.g. who maintains boundaries and whether there have been any disputes).

R

Radon Gas

A naturally occurring radioactive gas which may if above certain safety levels require preventative action to be taken (e.g. more ventilation in a property).

Redemption

When a mortgage is paid off in full.

Redemption

This is the sum of money transferred to a lender if you decide to pay back your mortgage early, consisting of the outstanding lump sum balance in addition to a penalty fee charged to cover the interest the lender will subsequently lose out on.

Redemption Penalty

A penalty charged by a mortgagee when you redeem a mortgage within a fixed rate, discounted rate or cashback period.

Registered land

Land which is registered has its ownership details recorded at the Land Registry.

Remortgage

Changing a mortgage from one mortgagee to another.

Rentcharge

Some freehold properties are subject to a rentcharge payable to the rentcharge owner. This may be to ensure income for the original land owner without the existence of a lease or it can be to ensure that estate covenants can be enforced more easily.

Rentcharge

Some freehold properties are subject to a rentcharge payable to the rentcharge owner. This may be to ensure income for the original land owner without the existence of a lease or it can be to ensure that estate covenants can be enforced more easily.

Reparations

The compensation or remuneration required in the event of a breach of contract.

Reparations

The compensation or remuneration required in the event of a breach of contract.

Repayment Mortgage

Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender on time, your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term.

Report on Title

A report required by the lender and supplied by the buyer’s solicitor containing information about the property.

Repossession

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

Repossession

When the mortgage lender takes away your home because you have fallen too far behind on your mortgage repayments.

Requisition on title

Queries raised about the ownership of the property and how that ownership will be transferred.

Reservation Fee

An administration fee charged by some mortgagees to cover the cost of reserving a mortgagor's entitlement to a loan on certain terms or possibly a fee paid to a builder to reserve a particular new property.

Retention

Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

S

Sale Agreed

A verbal agreement from the seller.

Searches

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

Seller’s Property Information Form (SPIF)

A standard form completed by the seller which contains information to assist the buyer’s solicitor to determine whether his client should proceed with the transaction.

Service Charge

A payment required by a lessor or managing agent to cover the costs of maintaining and running a development (e.g. gardening and decorating and also insuring a block of flats).

Smoke Control Order

An order made by the local authority designating an area to be one in which only smokeless fuels may be burnt (i.e. not coal or wood).

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.

Structural survey

An assessment of the essential framework of a building.

Subject to Conclusion of Missives

Scotland only. 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.

Subsidence

Where a property moves due to inadequate foundations or severe change to the underlying ground resulting in instability in the structure of a building often evidenced by cracks in walls.

Survey

An inspection made by a qualified surveyor. There are three main types of survey.

Surveyor

The person who carries out a structural survey of a property, examining the structure and general state of the house.

T

Tenants

People living in a property owned by someone else.

Tenants in common

Where two or more people own a property as ‘tenants in common’, and one of them dies, the deceased’s share of the property will pass according to what has been stated in the deceased’s will (or according to the rules of intestacy, in the even of no will having been made).

Tender

The process whereby the seller asks for written offers on a property usually with a set closing date. When a property is sold by tender, the buyer pays the fees.

Tenure

The type of property: Freehold or leasehold.

Term

A period of time, such as the length of a mortgage.

The GLA

The Greater London Authority or its duly appointed agent.

The HCA

The Homes and Communities Agency (now Homes England).

Third party rights

When someone other than the legal owner of a property has the right to use or control the land of which they have no ownership.

Tin Search

A search to establish whether the property may be affected by tin mining activity which may result in subsidence.

Title

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

Title deeds

Title deeds provide proof of ownership on a particular property. Mortgage lenders will hold onto title deeds as they legally own the property until the mortgage is paid back. Once you have instructed a conveyancer they will arrange to obtain the title deeds from the lender.

Transfer Deeds

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

Transfer of Equity

A document transferring ownership of a share or interest in a property from one person to another.

Tree Preservation Order

An order made by the local authority designating a tree or group of trees as protected and requiring the local authority's permission to lop or fell them.

U

Under Offer

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

Unexpired Term

The remaining term on a lease (A lease granted for 99 years, 10 years ago will have an unexpired term of 89 years).

Unregistered Title

Where the title to a property has not previously been registered at the Land Registry and ownership is proved by the production of a complete chain of documents showing successive ownership.

V

Vacant Possession

Possession of a property free of the presence of any people, possessions or rubbish.

Valuation

A very simple form of survey designed to establish the market value of the property.

Valuation Survey

The survey undertaken on behalf of the lender to ensure the house value is high enough to secure against any mortgage.

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

Wayleave Agreement

A formal agreement entered into with a property owner to give a service provider (e.g. Electricity or Telephone company) a right for their pipe or cable to pass through or over their property.

Writ

Mode of commencing legal proceedings.