A
Age-exclusive development
Developments and properties where the purchaser has to be above a certain age – typically over 55-years-old.
Affordable homes
This can mean homes that are given to a housing association to rent out as well as houses that are shared ownership. A term not normally applied to property that is merely cheap in price.
Annual percentage rate (APR)
This figure allows you to calculate the true annual cost of your loan, expressed as a percentage. It incorporates all ongoing costs, arrangement fees and interest charges. By law, mortgage lenders have to quote the APR alongside their quoted rates for each mortgage.
Arrears
If you fail to keep up your monthly mortgage repayments, you fall into arrears.
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B
Bridging loan
A loan that financially covers the period of time between paying for a property and receiving the payment from the sale of your own property.
Brownfield
Land that has had a previous use before being used for housebuilding. This could be a car park or a piece of land where a redundant factory used to stand.
Buildings insurance
Covers the cost of rebuilding or repairing the structure of the property. Your lender will insist on buildings insurance before offering you a mortgage.
Buy to let
When you buy a property with the intention of renting it out to a third party.
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C
Chain
When several people are dependent on one another’s sales to complete their own purchase.
CHAPS payment
Clearing House Automated Payments System. A telegraphic transfer of money, normally from your lender to your solicitor. You will be charged for this transaction.
Communal areas
Areas in an apartment block that are shared by residents, such as hallways and foyers. These are maintained by a management agency, and repairs and upkeep are paid for by an annual service or maintenance charge.
Completion
When the money your mortgage lender has loaned you is paid, and when the deeds and the keys are handed over.
Conditions/Terms of sale
The terms in the contract as stipulated by a buyer or seller to which he will agree to buy/sell the house.
Contents insurance
Cover against accidental damage or theft of all moveable contents, including furniture, appliances and soft furnishings.
Contract
The agreement to buy/sell the property. This is not binding until contracts are exchanged between vendor and buyer.
Conveyance
The legal process involved in transferring property and land from one owner to another.
Council Tax
An annual charge paid by the occupiers to the local authority. This helps pay for services like refuse collection. The charge depends on the type of property you have and each home falls into a band, each carrying a different fee.
Credit scoring
A lender’s way of assessing how much of a risk you are. You can build a credit rating through prudent use of credit cards and overdraft facilities. However, there is no such thing as a ‘black list’.
Critical illness cover
Insurance that pays out a lump sum if you are diagnosed with a life-threatening illness.
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D
Deposit
An initial payment that is made when you exchange contracts. Usually five per cent or more of the asking price.
Downsizing
When a purchaser requires a smaller, more manageable property.
Drying out/settling period
A period of time when a new-build property settles down. It is advised you do not wallpaper before this period of time is over.
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E
Empty nester
A homeowner whose children have left the family home, leaving them with more space than necessary.
Enhanced category 5/Cat5e cabling
A cable designed for data networks to support very-high-speed data transmission, like ISDN lines.
Equity
The value of the property minus the mortgage loan left to pay.
Exchange of contracts
Where vendor and buyer each sign a copy of the contract. At this point the sale becomes legally binding.
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F
Fixtures and fittings
All non-structural items, like curtain poles, mirrors and plant pots, which are included in the sale of a property.
Freehold
When the property and/or the land belongs to you or your dependents indefinitely.
FSBO
Abbreviation for ‘For Sale By Owner’. Means the property is being sold privately without an estate agent.
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G
Gazump
When an accepted offer is beaten by a rival purchaser with a higher offer.
Gazunder
When the buyer will only proceed with the property purchase if the seller reduces the price.
Green belt land
Areas of the country that are protected from development by law.
Greenfield
Open countryside and green space where housebuilding is permitted.
Ground rent
An annual (and normally nominal) fee paid to the freeholder by the leaseholder of a property.
Guaranteed rental income
When a housebuilder or developer can guarantee, for a period of time, you will receive a certain level of rental return.
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H
Home Information Pack
The government is introducing Home Information Packs (HIPs) in June 2007. The vendor will have to provide and pay for a pack that details the property’s history, and should include a survey. Responsibility for this information is currently borne by the purchaser.
HomeBuy
A series of government-funded schemes that help people to buy a home who would otherwise not be able to afford it. The schemes assist buyers to purchase homes via local authorities and housing associations, as well as new-build and resale homes on the open market.
Housing association
A non-profit making organisation that provides and regulates social housing and shared ownership schemes.
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I
Inheritance Tax
The tax your ‘estate’ pays when you die. If your estate (inheritance) is over £285,000 in value (this includes the value of your property and any savings), subject to certain other exemptions and reliefs, you will have to pay 40 per cent on the excess.
Integrated appliances
Appliances, like washing machines and ovens, which are built into kitchen units. For instance, the hob will be sunk into the work surface and a fridge will sit behind a door that matches the kitchen units.
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J
Joint tenancy
When two people own half-shares of a property. If one dies the other automatically takes the whole property.
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K
Key workers
Employees vital to the running of the country, including teachers, nurses, police officers and fire fighters. These groups are often given first refusal on subsidised housing near to their place of work.
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L
Land Registry
The government office that registers land and property in England and Wales. ‘Title’ (property) is registered to land, and any relevant dealings, such as sales and mortgages, are recorded.
Leasehold
When ownership of a property is subject to lease from the freeholder (the owner of the land upon which the property sits). Leasehold properties - usually flats – are leased for a fixed number of years, usually 99 years or more.
Licensed conveyancer
A person qualified to handle the legal aspects of property transfer but who is not a fully qualified lawyer.
Live/work
When planners specify that a certain percentage of the square footage should be given over to work space.
Local council searches
A process that will identify any plans that might affect your property, such as a motorway extension. Carried out by a conveyancer before you purchase a property.
Low-emissivity glass
Energy efficient glass that is coated to reflect heat back into a room.
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M
Mortgage arrangement fee
A sum of money a bank or building society will charge you to set up a mortgage.
Mortgage indemnity guarantee (MIG)
A compulsory and potentially costly insurance policy that’s required by a lender for a loan that’s greater than a certain percentage of the property (typically 90 per cent).
Management company
A company appointed to look after the communal spaces in an apartment block or on a development.
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N
National Security Inspectorate (NSI) approved alarm
Alarms approved by this security body will qualify you for cheaper contents insurance as it will have met exacting standards. Check with any supplier if the alarms are NSI approved before you buy them.
New-build
A property that has been built from scratch.
NHBC
The National House Building Council. It provides a ten-year Buildmark Cover Warranty on the structure of some new houses. Zurich is another company that provides warranties for new-build homes.
NHER
National Home Energy Rating. A detailed estimate of a property’s fuel bills. Expressed on a scale of 1 to 10, with 10 being the best. The NHER includes electrical costs and weather exposure.
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O
Off-plan
When you buy a property before it has been built or finished.
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P
Part-buy, part-rent (now Shared Ownership)
Schemes where you can buy a share of a property and rent the rest. If you want to move, you sell your share of the property back to the company you rent from. You can also increase the share of the property you own as your financial situation changes.
Penthouse
A luxurious property that should be at the top of an apartment block. A penthouse should provide more space and a better specification than a standard apartment in the same scheme.
Pepper-potting
A guideline that insists that housebuilders mix affordable housing in with private housing, rather than clump the affordable homes together.
Planning
The process where a housebuilder’s plans will be examined and detailed by local planning officers. Planning can take years for approval as many amendments may have to be made.
Planning permission
Consent granted by a local planning authority for any significant alterations.
Planning Policy Guidance (PPG)
Notes that set out the government’s policies on different aspects of planning. They have to be taken into account by regional planning bodies, local planning authorities and housebuilders when preparing development plans.
Plot
An area of land that a property is to be built on or already occupies.
PPG3/Planning Policy Guidelines 3
The Planning Policy Guidelines that relate specifically to housing. They encourage pepper-potting, sustainable development, high-density developments and regeneration.
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R
Redemption charge
A fee payable on some mortgages if you pay the debt off early or want to transfer your mortgage to another lender.
Reservation fee
A small fee, usually between £200 and £500, which a housebuilder will accept to hold a property before a deposit is paid. Commonly used to secure off-plan property.
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S
SAP rating
A rating based on an estimate of the annual heating and hot water costs per square metre of a property. The SAP scale runs from 1 to 120, with 120 being the best. The national average SAP rating is 43, while new-build homes achieve a rating of between 75 and 100. Every housebuilder should display a SAP rating for each home.
Sealed bid
A method of making offers on a property, often adopted if there is a lot of interest. The vendor invites all interested parties to place their highest offer in a sealed envelope to be opened on a specified day.
Searches and disbursements
Extra costs charged by a solicitor and this should include the Land Registry fee.
Service or maintenance charge
An annual charge to residents by a management company to cover repairs and maintenance of communal areas.
Shared ownership
When you will share the ownership of a property with a third party – the same as part-buy, part-rent.
Sink fund
A lump of money financed by service charges intended to cover any major repairs to a building.
Site
An area of land for new homes that is still under construction.
Snagging
The process when the housebuilder inspects a new-build home for quality of finish. The intended resident should also compile a snagging list either before they move in or just after.
Stamp duty
A tax you have to pay to the government when you buy a house. Currently, if your purchase price is below £125,000, you don’t have to pay stamp duty. Some areas of the country have a different stamp duty threshold, especially those considered to be deprived. If your purchase price is between £125,001 and £250,000, stamp duty is 1 per cent of the property price. This percentage rises to 3 per cent if your purchase price is between £250,001 and £500,000 and rises to 4 per cent on anything valued in excess of £500,001.
Subject to contract
A term normally used when an offer has been placed on a property. The offer is ‘subject to contract’ - the agreement to purchase a property – and is not yet legally binding.
Survey
A report commissioned by the purchaser and carried out by a professional that details the condition of the intended property. It should highlight areas that are cause for concern and also confirm the house is worth its asking price. There are three levels of survey; the homebuyer’s report (recommended for properties no more than 30 years old), a building survey (recommended for houses that predate the Second World War) and a full structural survey (recommended for unusual or very old houses, as well as those that have had major alterations). Will also provide general building maintenance advice.
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T
Tenants in common
Joint owners of a property. Each is free to dispose of their share as they wish.
Title deeds
The documents confirming the ownership of the land or the property.
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U
Unit
Housebuilders often call one property a unit.
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V
Viewing
When a prospective purchaser visits a property that is on the market.
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W
Warranty
A guarantee to accept responsibility for necessary repairs over a specified period of time. Zurich and the National House Building Council (NHBC) are two companies that supply warrantees to the new-build industry.
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