The property world is packed full of words and expressions that are unfamiliar to those who are new to buying, selling, renting or letting a home. In this guide, we will be covering definitions of key words you should know, whether you are a tenant, landlord, buyer or seller.
Letting / Renting
Rent that is outstanding on a property, which the tenant should pay the landlord.
Assured shorthold tenancy (AST)
A rental agreement where net rent does not exceed £25,000 a year and lasts for a fixed period. Therefore both the landlord and tenant know the date in which the property will be vacated.
A clause agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause allows either the landlord or tenant to give written notice after a set period of time, in order to end the tenancy earlier than the original fixed term.
A monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms. This is usually the equivalent to six weeks’ rent but may vary.
Items that have been damaged during a tenancy. The tenant is usually responsible for the cost of repair or replacement.
Fixtures and fittings
Items provided in a rental property such as curtains, carpets, blinds, light fittings, kitchen units and appliances. In some cases it may also include furniture.
A guarantor is a form of insurance for the landlord, should they doubt a tenant’s ability to make consistent rental payments/ adhere to the contract. A guarantor signs the tenancy agreement, agreeing to take on full obligations of rent etc. on the tenant’s behalf.
House in Multiple Occupation (HMO)
A property is a HMO if at least three independent tenants live there, forming more than one household and there is a shared/ communal facility such as a toilet, bathroom or kitchen facilities.
A property inventory is a document that provides an accurate in-depth review of the conditions and contents of a property at the start of a tenancy and the end of the tenancy. It is often carried out by a third party and includes photographs of specific items and existing damage/defects.
The legal document detailing the occupation of a tenant in a property, for a specific length of time. At the end of the period the property reverts to the owner.
The person/entity who owns the property you are renting.
An agent or company that is given responsibility for the maintenance and management of the property, by the landlord.
Multiple agent instructions
Where more than one property agency is instructed by a seller or landlord to market a property for sale/ rent.
The period of time that a tenant or landlord must give to end the tenancy agreement.
The duration of an occupation of a property by a tenant, under the terms of a lease.
The legally-binding agreement governing the occupation of a property by a tenant.
Tenancy Deposit Scheme (TDS)
An insurance-based scheme run by The Dispute Service Ltd. 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. It is one of three schemes approved for tenancy deposit protection.
The person who has temporary possession of a property under a lease or tenancy agreement.
Buying / Selling
These are fees charged by a mortgage lender or broker to arrange a loan.
A chain is formed when several property sales and purchases are interdependent, for example the purchase of one property can only occur after another has been sold.
The point when the sale of the property is concluded and the buyer receives the keys. This occurs after the exchange of contracts (see below).
A representative, solicitor or licensed conveyancer, who deals with the legal aspects of buying or selling a property. The buyer and seller will each appoint their own conveyancer.
The legal process of transferring the ownership of a property.
The items in addition to legal fees in conveyancing. These may include Stamp Duty Land Tax, Land Registry fees, search fees, mortgage redemption costs and any other expenses.
The Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. The grades range from A (the best) to G (the worst).
Your equity in your property is how much of it you own. It is the sum of the difference between the value of your home and the mortgage you still owe.
Exchange of contracts
When the buyer and seller both sign the contract for sale and the conveyancers action the exchange. When this occurs, the sale is binding and no terms may be altered.
Fixtures & fittings
Fixtures are items that have become part of a building or land and are therefore included in the sale. Fittings are not attached to the building or land and so are not included in the sale unless otherwise agreed. The seller will complete a fixtures and fittings form that will confirm what is included in the sale, what isn’t included, and what is for sale separately.
The type of ownership of a property: for example, leasehold or freehold.
A form of property tenure which is permanent and absolute, signifying outright ownership of the property and grounds. The owner of the land or property has freedom to lease it out or dispose of it at will.
A Leasehold sale means that you own the property, but the land upon which the property is built is owned by the freeholder.
Where a sale is agreed to a buyer at a certain price and then the seller accepts a higher offer from another buyer. Until contracts are exchanged, estate agents are legally obliged to tell a seller about any offer they receive on a property.
Where a buyer reduces their offer at the point of preluding the exchange of contract.
The annual charge levied by the freeholder, on the leaseholder of a property.
Help to Buy
A government scheme where buyers contribute a 5% deposit and the government provides an equity loan for up to 20% of the property value (40% within London), and buyers must provide the rest, typically from a mortgage. Available only for new-build under a certain amount (e.g. less than £600,000 in England, £300,000 in Wales); the loan is interest-free for the first five years.
When a seller/vendor grants an agency the authority to market their property.
A government office which is responsible for holding records of land ownership and any charges, including mortgages, against the property.
Buildings of special architectural or historic interest. A listed building may carry certain obligations and restrictions governing its use, repair, and maintenance.
Maintenance charge or service charge
Many leasehold properties (especially flats) are subject to such a charge which pays for items such as the insurance and maintenance of the building.
A flat with its own private entrance.
Open house (or open viewing)
A process, normally managed by an estate agent, where several house hunters are given a time of a few hours when they can all go and view a property for sale instead of separate, private viewings.
An alternative home ownership scheme which gives first time buyers/those who don’t own a home the chance to purchase a share in a new build or resales property.
This is a report prepared by a qualified building surveyor to check the structure for any faults. Home owners can choose from three main types of structural survey, depending on how much information they want.
Valuation (or market appraisal)
A term often used by estate agents to cover the process of them giving an opinion of the open market value of a property.
The owner selling his/her property.
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