Sales Jargon Buster

Acceptance Letter

If you accept a lender’s mortgage offer this document will need to be signed and returned to the lender.

Annual Percentage Rate (APR)

The APR is a figure that is used to compare different mortgages. Defined by law, it includes repayments on the loan plus any fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing, and should appear on all mortgage payment breakdowns.


The name given to a potential purchaser.


The increase in the value of a property due to changes in the market.

Arrangement Fee

This is a charge levied by a mortgage lender to cover the costs of administering and reserving the funds for certain types of mortgage.

Base Rate

The lowest rate of interest a bank will charge when it lends money.  It is used as a benchmark to set interest rates for borrowers. Lenders will charge borrowers a margin above the base rate.

Building Survey

A full inspection of the property, conducted by a chartered surveyor, who will write a detailed report setting out the soundness of a property and any property defects.

Buildings Insurance

An insurance policy that pays the cost of repair or rebuilding if a property is damaged or destroyed. Buildings insurance needs to be taken out as a condition of of taking loan from a lender.

Buy To Let Mortgage

A mortgage designed for customers who want to buy a property intending to let it.

Bridging Finance

Under certain circumstances, a purchaser may wish to complete the purchase of a property before his own has been sold. If so, lenders will advise as to whether the necessary temporary finance can be made available and the purchase can go ahead earlier.

Broker's Fee

The fee charged by a broker for finding the most appropriate mortgage.


The amount of money put into buying a property or the deposit placed on a property. This is also known as equity.

Capped Rate

The maximum interest rate you will pay on a mortgage for an allocated period of time, usually the first few years of the loan.

Capital Appreciation

The growth or gain in the value of a property over time.

Capital Gains Tax

A tax on profits above a fixed level made from the sale of a house or shares.


A property pledged as a guarantee for the repayment of a loan.

Commission or Fee to the Estate Agent

The money paid to the agent, usually on completion (legally it is payable on exchange of contracts).


The finalising of the sale when all monies are exchanged and the buyer gains access to the property.


Entered into by the vendor and purchaser of a property that only becomes binding on exchange (when both parties have signed the contract and the buyer has handed over the agreed deposit (if any) to the vendor).


The legal process transferring ownership from vendor to buyer.

Credit Check

The procedure by which a check is made on the credit history of a mortgage applicant, usually carried out by a dedicated credit check agency on behalf of a prospective lender.

Credit History

A history of a person’s open and fully repaid debts. Checking a person’s credit history helps a lender to assess the likelihood that a borrower will maintain their mortgage repayments.

Credit Report

A report produced by a Credit Reference Agency which shows the credit history of a person. The credit report is used by a lender to help assess the applications of prospective borrowers.


Also known as Title Deeds. The legal documents that set out ownership of a property. Transferred to the new owner on the sale of a property and also held by the mortgage lender.


The money paid to the vendor on exchange of contracts on a property


The fees paid by the solicitor on behalf of the buyer such as stamp duty, land registry and search fees.  Also known as legal fees.

Discharge Fee

The fee paid to some lenders for releasing their hold over a property once you have paid off your loan. It usually applies if you pay off your mortgage before the end of the term.

Draft Contract

The first unconfirmed version of the contract that is drawn up when the sale is first agreed. It sets out the conditions of sale and will need to be confirmed by the vendor’s solicitor.

Equitable Interest

Legal rights in a property that do not include the right to sell its legal title.


The difference in the value of the property and the amount outstanding on any loan secured against it. If the size of the outstanding loan is greater than the market value of the property then this is known as negative equity.

Exchange of Contracts

The stage when the buyer and seller exchange signed, binding contracts of purchase and sale. Buyer and seller are then both committed to complete the transaction.

Existing Liabilities

Your financial outgoings, such as loan repayments, before taking out a mortgage. All such outgoings must be disclosed as part of the mortgage application process.

Fixed Rate Mortgage

A mortgage in which the interest rate is set for an agreed period of time.

Fixtures and Fittings

Items that are included in the sale of a property, e.g. carpets, curtains, curtain rails, wall lights etc.

Flying Freehold

A flying freehold is when part of a freehold property extends over a different freehold property or land.


Where the owner of the property also owns the land on which the property is built.


When the vendor has accepted an offer but subsequently accepts a higher offer from another purchaser.


When the buyer lowers the offer immediately prior to exchange of contracts.


Using loaned funds for investments. For example, buying a house with a small deposit and the rest with a mortgage and then selling the property on at a higher price, making a profit.

Ground Rent

Applies to Leasehold properties.  The sum paid annually to the Freeholder by the Leaseholder.

Guide Price

Guide prices are often subject to change and are not necessarily what the property will sell for. Sometimes the reserve price is higher than the guide price.

Home Buyers Report

The homebuyer’s report details the structural condition of most parts of the property that are readily accessible.  It does not involve an in-depth investigation or the testing of water, drainage or heating systems.


The term used when the estate agent is formally instructed by a property owner to market the property in order to find a buyer.

Interest Only Mortgage

A type of mortgage in which the borrower only repays the interest on the loan for the duration of its term and then repays the full loan amount at the end of the mortgage period.

Land Certificate

A certificate issued by the Land Registry as proof of ownership.

Land Registration

The process of registering your title to an area of land with the Land Registry, usually handled by a solicitor.

Land Registry

The Government department where details of properties with a registered title are recorded.

Land Registry Fee

The fee paid by a solicitor on the buyer’s behalf to register ownership of property with the Land Registry. This ensures that once you have purchased the property you are the legal owner of the land (if freehold).


Ownership of a property, normally for a fixed period of time. When the lease expires, the property returns to the freeholder.

Local Authority Search

A check carried out by a buyer`s solicitor to ensure that the prospective property is not subject to any local authority issues such as road or town planning or any enforcement notices.

Maintenance Charge

The charge made by the landlord to cover the costs of maintaining the property as set out in the lease. Usually charged annually.


A long-term loan for which property is secured against.

Mortgage Offer

The letter from the lender offering a loan and setting out the terms and conditions.

Multiple Agency

Where two or more agents are acting on behalf of a vendor. The agent who introduces a successful buyer is the only one paid.


An offer on the purchase price with the intention of purchasing

Peppercorn Rent

A trivial amount of ground rent.

Preliminary Enquiries

A set of questions raised by the solicitor of the buyer and sent to the vendor via his solicitor, prior to exchange of contracts. They ask for clarification of specific points about the property that is being sold.

Redemption Penalty

A penalty set by the lender when the borrower pays off a mortgage.


Refinancing a property by switching a mortgage from one lender to another or by taking out another mortgage to take advantage of any equity gained by a rise in value.


The legal procedure by which the mortgage lender takes possession of a property due to non-payment of the mortgage.

Right of Way

A person’s legal right to use a particular part of a property, in order to gain access to part of his own property.


A request for information concerning the property held by a local authority or by the Land Registry

Sitting Tenant

To occupy the property as a tenant, and have legal rights without a lease. Any sale would be subject to any rights of a tenant who has occupation.

Sole Agency

When a seller gives authority to sell a property to one agent.

Sole Selling Rights

Where one agent has complete control of the sale.  The agent is entitled to his fee no matter how the property is sold.

Stamp Duty

Tax paid by the purchaser of a property to the Government

Structural Survey

A survey of the condition of a property, undertaken by a qualified surveyor. A structural survey is the most detailed of property reports available.

Subject to Contract

Used as a provisional agreement before contracts have been exchanged. Either party may still withdraw from the transaction.

Title Deeds

The legal documents describing the rights and liabilities which are attached to the property and prove ownership of property.

Title Search

An investigation carried out by a conveyancer or solicitor, into the history of ownership of a property. This checks for unpaid claims, restrictions or any other problems that may affect ownership.

Under Offer

When the vendor has accepted an offer for his home but contracts have not yet been exchanged. Either party may still withdraw from the transaction.


The owner of the property to be sold.


A basic survey carried out on a property for the benefit of the lender for mortgages purposes.

Lettings Jargon Buster


Money that is unpaid by a tenant in whole or in part after the date specified in the tenancy agreement.

Assured Shorthold Tenancy (AST)

An assured shorthold tenancy offers the landlord a guaranteed right to repossess their property at the end of the term specified in the tenancy agreement.

Block Management

Agents acting on behalf of freeholders and leaseholds for blocks of apartments and flats. Generally involves organising internal cleaning, garden maintenance and redecorating.

Break Clause

A clause sometimes inserted in a fixed term tenancy, usually allowing either landlord or tenant to give two months written notice at any stage after a particular date or period of the tenancy.  This terminates the tenancy earlier than the end of the original fixed term.

Buy to let mortgage

A mortgage that is designed specifically for people buying a property with the intention of letting it out.

Credit Search References

References requested for a tenant applying for rented accommodation by the landlord or agent. Usually carried out by external companies who will contact the prospective tenant’s employer, landlord and also check the tenant’s credit history.


The cash amount held by the landlord or agent for security against damage to a property. Usually about six weeks rent.


Damage to a property or contents that is more than acceptable wear and tear.

Execution of a Tenancy

The procedure to finalise a legally valid tenancy by dating the Original (signed by the landlord) and the Counterpart (signed by the tenant) and exchanging them.


Contracts to let residential property are for a fixed term. On expiration of that term an extension may be negotiated, which can be referred to as a renewal, for a further fixed term, month-by-month or quarterly basis.

Fixtures and fittings

The Landlord must ensure that a gas safety check is carried out prior to a let and then annually after that by an authorised CORGI registered engineer.

Ground Rent

The annual charge paid by the leaseholder to the freeholder.

Grounds For Possession

The reasons for applying to the courts for repossession of a property.


A person who cant  guarantee rental payments and other obligations of a tenancy to a Landlord.

Holding Deposit

This is nominal amount that is asked for when a tenant applies for a tenancy of a property. If the tenancy does not proceed because the tenant pulls out or the references are unacceptable, this deposit is usually retained by the agent. If the tenancy proceeds, then the amount is deducted from the first month’s rental or deposit.


House in multiple occupation, refers to bedsits or flats which usually offer a self-contained room with either cooking facilities in the room, a shared kitchen or shared bathroom and toilet facilities. Under the Housing Act 2004 it covers any property occupied by more than one household.

Initial Term

This describes the initial period of the tenancy.


An inventory details the contents of a property and can include the state and condition of a property including the fixtures, fittings and the garden.

Maintenance Charge

A charge payable covering the cost of repairing and maintaining the external or internal elements of communal parts of a building, mainly applies to flats and apartments.

Managing Agent

A person or company responsible under an agency agreement for the maintenance and management of a property.

Multiple Occupation

A property which is occupied by more than one tenant and not used as a single home. This is where individual and private rooms may be locked but where tenants share facilities, including residential property which is occupied by separate tenants under individual agreements.

Notice Period

The amount of notice that the Landlord must give to the Tenant to end the tenancy and vice versa.

Occupancy Rights

These are contained within the tenancy agreement and give the tenant right of occupancy of the property.

Owner Occupier

The person who owns the property and who will be living in the property as his sole or principle residence.

Periodic Tenancy

Either Contractual Periodic whereby a tenancy is contracted by agreement to run from month to month, or Statutory Periodic which refers to when a fixed term comes to an end and the tenant remains, by agreement, in the property under the same terms and conditions as the original agreement and runs from month to month or quarter to quarter, depending upon the basis on which the rent is paid.

Power of Attorney

A legal document giving a third party absolute or limited rights over the principal’s property and assets.

Public Liability Insurance

An insurance policy that protects members of the public who are injured or affected by an accident or occurrence.


Allows a Landlord to check a tenancy applicant’s suitability to be able to pay the rent and also the applicant’s track record in earlier rentals.

Resident Landlord

Where the Landlord occupies part of the dwelling as his main or principle home and lets the rest of the property.

Ring fenced

Refers to money held in such a way that it can only be used for a specified purpose. So in the case of a tenancy deposit, it can be used only for the purposes set out in the tenancy agreement.

Sole Agent

Where one agent is instructed to undertake a sale or let.

Stamp Duty

The tenant is responsible for paying any Stamp Duty (SDLT Stamp Duty Land Tax). The starting point is currently is £120,000 in one agreement, therefore the rental (without any gardening / cleaning or other additions included) would be over £10,000 a month before Stamp Duty Land Tax is payable.

Statutory Obligations

Requirements and obligations placed on landlords and agents by law

Subject to Contract

Means that an agreement is not yet legally binding.


When a tenant lets accommodation to another person.

Tenancy Deposit Scheme (TDS)

For the protection of tenancy deposits and the resolution of disputes between landlords, agents and tenants concerning the return of deposits at the end of a tenancy. The TDS is a mandatory scheme that has been set up in accordance with the Housing Act 2004.

The Term of Tenancy

This refers to the length of a tenancy. Most initial tenancy agreements are for a minimum of six months, although they may be shorter and longer.


Rental income from a property calculated as a percentage of its value.

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