Home buying glossary
- Claudia Dessi
- Sep 29, 2023
- 3 min read
Feeling baffled by complex industry jargon? Purchasing a property can be challenging on its own, let alone deciphering the cryptic language of real estate. Here's a little assistance from us
Conveyancing: The legal process of transferring property ownership from the seller to the buyer. This includes property searches, contract preparation, and the exchange of funds.
Mortgage: A loan used to purchase a property. The property itself serves as collateral for the loan, and it's typically repaid in monthly instalments.
Deposit: A sum of money paid by the buyer to the seller as a sign of commitment to purchase the property. It's usually a percentage of the property's purchase price.
Stamp Duty Land Tax (SDLT): A tax levied by the government on property purchases over a certain threshold. The amount depends on the property's value and the buyer's circumstances.
Title Deed: A legal document that proves ownership of a property. It includes details about the property's boundaries and any restrictions or rights associated with it.
Freehold: Ownership of both the property and the land it stands on. The owner has full control and is responsible for maintenance and any associated costs.
Leasehold: Ownership of a property for a specified period, subject to the terms of a lease agreement with the freeholder (landlord). Common in flats and apartments.
Ground Rent: An annual fee paid by leasehold property owners to the freeholder for the use of the land on which the property is built.
Chain: A series of property transactions where each purchase is dependent on the successful sale of the previous property. A "chain break" can lead to delays or the collapse of a deal.
Completion: The final step in the home-buying process is when the property is officially transferred to the buyer, and they receive the keys.
Exchange of Contracts: The point at which the buyer and seller legally commit to the property transaction. It's also when the deposit is paid.
Survey: An inspection of the property's condition to identify any structural issues or defects. Types of surveys include a Homebuyer's Report and a Building Survey.
Estate Agent: A professional who assists in buying or selling property. They typically act on behalf of the seller (seller's agent) or the buyer (buyer's agent).
Local Authority Search: A check with the local council to gather information about the property and its surroundings, such as planning permissions, road maintenance, and environmental factors.
Land Registry: A government office responsible for maintaining records of land and property ownership in England and Wales.
Gazumping: When a seller accepts a higher offer from another buyer after already agreeing to sell the property to someone else, typically causing the original buyer to lose out.
Gazundering: When a buyer reduces their offer just before the exchange of contracts, putting pressure on the seller to accept the lower price.
Valuation: An assessment of a property's value carried out by a surveyor, often required by a mortgage lender to determine the loan amount.
Completion Date: The agreed-upon date on which the property sale is finalized, and the buyer takes possession of the property.
Chattels: Moveable items within the property, such as furniture and appliances, which may be included or excluded from the sale, depending on negotiations.
Agreement in Principle (AIP): Also known as a Mortgage in Principle or Decision in Principle, an AIP is a preliminary assessment from a mortgage lender that indicates how much they might be willing to lend to a prospective homebuyer. It is not a formal mortgage offer but can help buyers understand their budget and make more informed property decisions.
Lump-Sum Reduction: A lump-sum reduction refers to making a substantial, one-time payment toward the principal balance of a mortgage. This payment is in addition to the regular monthly mortgage payments and is typically made to reduce the overall loan amount, interest charges, or the mortgage term. It can be a strategic way to pay off the mortgage faster or decrease long-term interest costs.
This glossary should help you understand some of the key terms and concepts involved in the home-buying process in England and Wales. Keep in mind that the terminology and processes may vary, so it's important to seek professional advice and consult local regulations when buying a property in these regions.
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