Let's be honest - property jargon reads like it was written by a Victorian solicitor who never retired. A lot of it was. Buying a home is already stressful enough without decoding a foreign language every time your conveyancer sends an email. So we've pulled together every term you're likely to encounter, in plain English, so you can focus on the exciting bit - actually buying your home.
A document from a mortgage lender that indicates it will lend you a certain amount based on your earnings and usually a credit search and credit score. An AIP will help prove to a seller you're a serious buyer and helps you understand how much you could borrow.
It is not a guaranteed mortgage offer, as the lender will still carry out full checks and a property valuation before making a final decision.
A widely used rental agreement that covers a fixed period, so both the tenant and landlord know the date the property will be vacated. Under an AST, tenants have certain legal protections, but landlords also have the right to regain possession of the property after the fixed term, provided they follow the correct legal process and give proper notice.
A document you sign and hand back to the mortgage lender to confirm you want to accept its offer.
An arrangement fee (also known as a product, booking, or facility fee) is a charge by lenders to set up a mortgage or business loan. This fee covers administration costs, can be fixed or a percentage of the loan, and is typically paid upon completion. Most often this applies to deals with special rates, such as fixed rates or trackers.
The amount of money that is overdue on your mortgage, for example if you miss a mortgage payment. If left unpaid it may result in the lender repossessing the property.
Interest rate set by the Bank of England every month (also known as base rate or simply interest rate). If the rate you pay on your mortgage is variable, it may be affected if the bank rate changes.
A high-interest temporary loan that offers short-term access to money, so you can buy a property before selling your existing home, for example. Bridging loans are normally due to be repaid within six or 12 months.
An insurance policy that covers any structural damage to your property from events such as a fire or flooding. If you need a mortgage, building insurance will be a condition of the loan and should normally be paid for at the point of exchange. A commonly misunderstood aspect of home-buying is that the buyer, NOT the seller is liable for any damage to the property after exchange. So if there was a leak or damage to the roof during a storm for example, the buyer would be responsible to pay for the damages.
Formerly known as a structural survey, a Building Survey is a detailed report on the construction of a property. It's the most comprehensive survey you can buy and is suitable for listed buildings, older or unusual homes or ones you intend to completely renovate.
A clause sometimes 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 will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.
Being a cash buyer means you can afford to buy a property outright, without a mortgage or loan. A cash buyer must have the money available to purchase the property when making an offer and not rely on money from selling another property. If you're buying a house with cash, the process is essentially the same as buying a house with a mortgage but there will be fewer hurdles. This generally makes the whole process quicker because you won't need to apply for a mortgage and all that entails.
A capped rate is a type of variable rate mortgage that includes a guaranteed maximum interest rate, or "cap", for a set period, usually two to five years. It allows your interest rate to fall if the lender's Standard Variable Rate (SVR) drops, but ensures payments never rise above a certain level.
The amount of money put into either buying a property or paid as a deposit.
Most people need to sell their current home to be able to afford to buy the next one, and the people they sell it to need to sell their home as well. This is what is meant by a 'chain' and if one link pulls out, the whole chain can collapse.
To avoid property chains, act as a chain-free buyer or seller by selling your home first and moving into temporary accommodation, purchasing a new-build, or buying a repossession. Target properties which are listed as 'chain free'. These are normally inherited homes, second homes, landlords selling up, or the seller moving into rented accommodation or with family.
The 'hold' a lender has over the equity in your home. For example, if you owe £40,000 and fail to keep up repayments, you can be forced to sell your home to repay the debt.
A surveyor, accredited by the Royal Institute of Chartered Surveyors (RICS), who is employed to carry out a survey on a property. Make sure to check the surveyor is accredited by RICS before paying for a survey.
Completion is when you can move in! The sale of the property is finalised and the legal transfer of ownership passes from one party to another.
Often referred to as a CPO, a Compulsory Purchase Order allows local authorities to purchase property regardless of whether the owner wants to sell. However, the CPO must demonstrate how the purchase would benefit the public and adequately compensate the homeowner.
Terms defined in the contract which set down the rights and duties of both buyer and seller.
A clear 'snapshot' of the condition of your potential purchase. It's the most basic level of survey you can buy and is suitable for new-build homes and properties in good condition.
An insurance policy designed to cover any loss or damage to your possessions such as furniture, tech and appliances. It's not essential but is often a good idea whether you own your home or rent. Unlike buildings insurance, this is not required to be in place at the point of exchange, which most mortgage lenders will stipulate.
This is the binding document both the buyer and seller sign to complete the sale or purchase of a property. It can also be known as an agreement.
UK qualified licensed conveyancers are specialist property lawyers regulated by the Council for Licensed Conveyancers (CLC) to handle the legal transfer of property in England and Wales. They manage contracts, searches, and registrations, focusing exclusively on residential property, unlike solicitors who cover broader legal areas. They are officially recognised professionals authorised to act for buyers and sellers.
The name for all the legal work involved in transferring the ownership of a property from one party to another. Check out our guide to conveyancing for a more thorough breakdown of the process.
A credit report is a record of your history managing and repaying debt, including credit cards, loans and other bills. Credit reports are held (but not determined) by a credit reference agency such as Experian or Equifax. It's a good idea to view a copy of yours before applying for credit so you can see what the lender sees ahead of time.
A legal agreement drawn up by the conveyancer which sets down 'who gets what' if the property is sold or one owner buys out the other. It's a good idea for cohabiting couples or friends buying together.
The money you'll need to pay upfront when buying a home. The higher your deposit the more favourable the interest rates will be. Typically, an initial 10% is payable on exchange of contracts and the remainder is paid at completion. However, if you are taking a 95% mortgage, you'll only need to put down 5% at exchange.
Refers to a property that stands alone and has no shared walls, structure, or foundations with an adjoining property.
These are mandatory third-party costs paid by a solicitor or conveyancer on your behalf, separate from their legal fees. These expenses cover necessary searches, legal, and administrative tasks required to complete a property purchase or sale, such as Land Registry fees, local authority searches, and Stamp Duty.
A house currently not in good condition, that someone buys with the intention of working on it, improving it, and increasing its value.
The amount paid by the buyer to the seller on exchange of contracts to secure a property - usually 10% of the purchase price. Also known as a deposit.
Refers to a residential building divided into two separate units, each with its own entrance and living spaces.
The DPS is a tenancy deposit protection scheme authorised by the government; it is free to use and open to all landlords and letting agents. The custodial version of the scheme requires a tenant's deposit to be paid over to the DPS for the duration of the tenancy. This amount is then paid back at the end of the tenancy when an agreement between both parties has been reached, providing the tenant has paid rent and bills, has not damaged the property and met the obligations of their tenancy agreement. The DPS also offers an insured option whereby the deposit is held by the landlord or the agent and the tenant pays the scheme to insure it.
Items that have been damaged during a tenancy. The tenant is usually responsible for the cost of repair or replacement.
Sometimes referred to as early redemption charge. This is a charge incurred when you terminate a mortgage deal early - for example, in year three of a five-year fixed term mortgage. Most mortgage lenders will allow you to pay off up to 10% of your mortgage annually without incurring a charge.
A legal right that allows one landowner to use another person's land for a specific purpose. It does not grant ownership but allows restricted use, often running with the land and binding future owners. Common examples are rights of way (shared driveways), utility access, drainage rights, and rights to light.
Properties built between 1901 and 1910 during the reign of King Edward VII. Typical features include red brickwork, wooden doors with stained glass windows, elegant carved wooden porches, sash windows, dark wood floors, and decorative fireplaces.
A residential building located at the very end of a row of similar, connected houses (a terrace).
An endowment mortgage is an interest-only home loan paired with an investment policy (endowment) designed to pay off the principal balance at the end of the term. You pay interest to the lender and premiums into an investment, which aims to grow enough to repay the loan, but this is not guaranteed. Endowments have received bad press in recent years as many fell well short of their forecast value.
A legally required document for building owners, sellers, and landlords that rates a property's energy efficiency from A (most efficient) to G (least efficient). Valid for 10 years, it provides estimated energy costs, carbon emissions, and recommendations to improve efficiency. An EPC is legally required for properties being rented as well as for sale.
The final version of a document (usually a deed or statute) prepared by a solicitor.
Equity is how much of your home you own. You can be in positive or negative equity. It comprises any increase in the value of your home, as well as your deposit and the capital you have paid off the loan.
Equity release allows homeowners aged 55 and over to unlock tax-free cash from their home's value without moving out. As a form of later-life lending, it provides a lump sum or income, typically repaid when the owner dies or moves into long-term care. Common options include lifetime mortgages and home reversion plans.
Exchange of contracts is the legal, binding commitment in a property transaction where buyer and seller sign and swap contracts, usually handled by solicitors. It fixes the completion date and price, requires a deposit payment, and prevents either party from backing out without serious financial penalties.
When a buyer chooses a mortgage rather than taking advice from a mortgage broker/advisor.
Usually refers to someone who is buying their first property. However, it can also be used to describe someone who is buying a home without selling one.
A mortgage deal that comes with an interest rate that's 'fixed' for an initial defined period, typically for two, three or five years.
Fixtures (included in sale): Items fixed to the structure, requiring tools to remove, or meant to be permanent, such as kitchen units, integrated appliances, light fixtures, radiators, and curtain rails.
Fittings (removed by seller): Freestanding items like furniture, pictures, mirrors, lampshades, and non-integrated white goods.
A flying freehold is a legal term for when part of a freehold property extends over or under another person's property, such as a bedroom above a shared passageway or a balcony overhanging a neighbour's land. Legal issues can arise regarding the right to support and the responsibility to repair, as one owner may not be able to force the other to fix their part of the structure. While common, these arrangements can make selling more difficult, as some mortgage lenders may refuse to lend or require indemnity insurance.
If you own the freehold, you own the building and the land that it stands on outright indefinitely. As a freeholder, you are responsible for all maintenance and building insurance, with no ground rent, or lease restrictions. Freehold properties tend to be easier to purchase with less legal checks required.
When a higher offer is made by another party and accepted, even after the offer with the first buyer had been accepted.
When a buyer lowers their offer (usually at the final hour) so the seller is forced to accept their lower price or reject it and risk having to find another buyer. (D**k move).
Homes built between 1714 and 1830 during the reigns of King George (I to IV). Typical features include stucco fronts, tall sash windows and ceilings with decorative plasterwork.
Annual rent paid under the terms of a lease by the owner of a building to the owner of the land on which it is built. The Leasehold Reform (Ground Rent) Act 2022 banned ground rent on most new leases granted from 30th June 2022, setting it at a nominal 'peppercorn' rate i.e. £0.
A guarantor is a person (often a parent or close friend) who legally agrees to pay a tenant's rent or a borrower's debt if they fail to make payments. They act as a security measure for landlords or lenders, covering unpaid rent, damages, or loan repayments, and can be taken to court if they fail to pay.
A certificate that states all gas appliances, pipework and flues are safe. It is a legal requirement for all landlords and must be provided every year by a CORGI registered engineer after a safety check.
A Home Buyer Report (officially an RICS Level 2 Home Survey). It highlights major, visible defects, structural issues, damp, and urgent repairs to help buyers make informed decisions and renegotiate prices.
A property rented out by at least 3 people who are not from 1 household (e.g., not a family) but share facilities like a kitchen, bathroom, or toilet. Common examples include student shared houses, bedsits, and shared flats, which often provide higher rental yields for landlords.
A form of non-repayable financial assistance, usually provided by local councils or government bodies, to help homeowners, landlords, or sometimes businesses repair, modernise, or adapt properties. These grants aim to improve living conditions, safety, energy efficiency, or accessibility, often targeting vulnerable or low-income households.
Mortgage where only the monthly interest charges are repaid initially. The mortgage amount itself i.e. the 'capital' is not paid off. While this results in lower monthly payments, the original loan amount must be repaid in full as a lump sum at the end of the term.
Two estate agents jointly instructed by a seller to market a property.
Land charges are restrictions, prohibitions, or financial obligations placed on a property or piece of land by public authorities (Local Land Charges) or private individuals (Land Charges Act 1972). They bind current and future owners, covering items like planning conditions, conservation orders, or debts owed. Conveyancers will check for land charges on a property. If found they can impact the buyer's ability to get a mortgage.
The government department responsible for recording ownership of land in England and Wales. Searches will be requested from the Land Registry by conveyancers as part of any property transaction. The Land Registry provides official proof of ownership, protects against property fraud, and records, boundaries, and charges like mortgages.
Ownership and right to occupy a property by way of a lease agreement for a given period, usually subject to an annual payment of rent to the owner of the freehold. Leases are normally long term, ranging from between 90 years and 999 years. Short leases are unattractive to mortgage lenders, with anything lower than 80 years likely to be difficult to mortgage.
Institution that lends funds to assist the borrower with a property purchase.
Fees incurred by the lender in arranging a mortgage that are passed on to the borrower. These can either be paid upfront at the point of taking out the mortgage or added to the loan.
Loan To Value (LTV) is a financial metric, expressed as a percentage, representing the ratio of a loan (usually a mortgage) to the total appraised value of a property. It measures the portion of a home financed by a lender; lower LTVs mean more equity and better interest rates, while higher LTVs indicate higher risk. For example a £200,000 house with a £180,000 mortgage means a 90% LTV.
A local authority search is an essential, usually mandatory, set of enquiries made during the property-buying process, providing vital information about a property and its surrounding area. It identifies risks, such as planning restrictions, listed building status, highway adoptions, or environmental issues, which could affect the value of the property.
The search typically consists of two main parts:
A self-contained, often two-storey, property that functions like a hybrid between a house and a flat, typically featuring its own private entrance directly from the street or an external staircase.
A mortgage booster (or "income booster") is a Joint Borrower Sole Proprietor (JBSP) arrangement allowing family or friends to add their income to a mortgage application, increasing the borrower's purchasing power without owning the property. The booster is legally responsible for repayments if the homeowner cannot pay. These are often used by first-time buyers to overcome affordability issues in high-cost areas.
A Mortgage Payment Protection Plan (also known as MPPI or ASU - Accident, Sickness, and Unemployment insurance) is an insurance policy designed to cover your monthly mortgage payments for a temporary period, if you are unable to work due to involuntary redundancy, illness, or injury. Usually 12 to 24 months. It acts as a financial safety net, helping homeowners avoid defaulting on their loans.
The period over which a mortgage will be repaid. Traditionally this was 25 years, but depending on a buyer's age this can go up to 30 or even 40 years. Longer term mortgages can make your monthly repayments lower, but you will pay more interest over time.
Report commissioned by the lender to ensure the property's market value covers the amount being borrowed. Not to be confused with a survey.
When the market value of a property falls below the outstanding mortgage loan balance. This situation usually results from falling property prices or high initial debt. It makes selling or refinancing difficult, as the sale proceeds will not cover the full debt. Negative equity limits your ability to move home or switch to a better mortgage rate.
The NHBC (National House Building Council) Scheme is a warranty and insurance provider for new-build homes. It provides a 10-year Buildmark Warranty that covers structural defects, protecting homeowners and ensuring homes are built to approved standards, often required by mortgage lenders.
If an NHBC warranty is not in place, architect's certificates are generally an accepted alternative. You will need to obtain a copy of the certificate so that you can ask your lender to confirm if they are prepared to lend against it.
Indication from a potential buyer of a willingness to purchase a property at a specified price. Offers can be submitted verbally or in writing to an estate agent. An offer is not legally binding in England and Wales and can be withdrawn or changed at any time prior to exchange of contracts.
The value which a property might reasonably sell for if sold in normal circumstances. Lenders use OMV for calculating Loan-to-Value (LTV) ratios to ensure the loan is secured, often using the lower of the purchase price or OMV.
A set of formal, written questions raised by a buyer's solicitor to a seller's solicitor, that must be answered by the seller prior to exchange of contracts.
A probate property is a home or asset owned by a deceased person that requires a Grant of Probate (or Letters of Administration) to be legally transferred or sold by an executor. For inheritance tax purposes the property may need to be valued and this is typically carried out by the district valuer who represents the Inland Revenue.
Contracts cannot be exchanged on a property until probate has been granted. Delays during the purchase process are common with probate properties. Usually due to beneficiaries disagreeing on the sale price or the Grant of Probate taking significant time to be approved.
Completion of the full and final repayment of a mortgage.
Amount required to fully repay a mortgage including interest and any penalties.
The most common type of mortgage, where your monthly payments cover both the interest on the loan and a portion of the original capital borrowed. By making these payments over a set term, you gradually reduce the debt and own the home outright at the end.
A house or property taken back by a mortgage lender or bank after the owner fails to maintain required mortgage repayments.
Property occupied for private or domestic purposes.
A legal entitlement, allowing specific individuals or the public to pass across land owned by another. These routes, which can be public (like footpaths) or private (neighbour access), are protected by law and cannot be blocked, even if the land is privately owned.
At the start of the purchase process a buyer's solicitor will make enquiries to the local authority and Land Registry to investigate any matters that will adversely affect a property's legal, financial, and physical status. Mortgage lenders will require searches to be completed and assessed by a conveyancer before approving a mortgage.
Searches typically cost between £200 and £400, but can vary depending on the council and the number of searches required. For example mining report searches can be required in parts of the country affected by previous mining locations.
A single-family dwelling that shares exactly one common wall with another neighbouring house, forming a pair.
A variable fee paid by leaseholders or tenants to landlords/management companies for the maintenance, repair, insurance, and management of communal areas and shared services in a building or estate. These often cover cleaning, lighting, security, lifts, and gardening, usually paid monthly, quarterly, or annually.
A property ownership structure for flats where residents are part of the group of people or company that make decisions and organise the maintenance of the building.
A government-backed, part-buy/part-rent scheme designed to help people with lower deposits purchase a home. Buyers purchase a share of a property (typically between 25% - 75%) and pay subsidised rent to a housing association or landlord on the remaining share.
Subject to contract, or STC, is often what you'll see on property listings where an offer has been accepted subject to contract. The offer is only finalised once contracts are signed and exchanged.
A member of the legal profession qualified to deal with conveyancing, the drawing up of wills, and other legal matters. Responsibilities include conducting searches, collecting funds and arranging and overseeing the exchanging and completion of contracts. Read more about choosing a legal professional to handle your property purchase in our conveyancing guide.
The tax paid by purchasers on land or property transactions in England and Northern Ireland over a certain price threshold. It applies to freehold/leasehold purchases, with rates calculated on a sliding scale based on the purchase price and property type. Stamp duty charges are different if you are purchasing via a limited company or as a second home. Stamp duty is not charged on properties purchased for under £125,000.
Where the developer of new build properties touches up paintwork, adjusts appliances and fixes any other faults within the property. A snagging survey is usually completed prior to the buyer moving in to spot minor cosmetic issues and check the quality of workmanship.
Compiled by qualified surveyors after a physical inspection of a property, assessing its condition, identifying risks and potential legal issues.
A refundable sum of money paid by a tenant to a landlord or letting agent before moving in, serving as security against rent arrears, damages, or cleaning costs. It is typically capped at five weeks rent (for annual rent under £50,000 in England) and must be protected in a government-approved tenancy deposit scheme (TDP).
A form of joint property ownership where two or more people hold specific, potentially unequal shares (e.g., 60/40) in a property. If an owner dies, the deceased owner's share is passed to their heirs via their will, not to the other owner.
A medium-density residential building that is part of a row of similar, joined houses sharing side walls with their neighbours. Typically, these houses share both side walls (mid-terrace), while end-of-terrace houses share only one wall.
Legal, often physical documents (like conveyances, contracts, or wills) that prove ownership of land or property and outline its history, boundaries, and restrictions. Title deeds are crucial for buying, selling, or mortgaging property, showing who owns it, and identifying any outstanding financial obligations.
A tracker mortgage usually follows the Bank of England base rate. If the base rate rises or falls, your monthly repayments change accordingly. They usually last for a set term, such as 2 or 5 years.
A seller has received and accepted a buyer's offer in principle, but the deal is not yet legally binding until contracts have been exchanged.
A property that has been vacated by any previous occupants upon the completion of the purchase or tenants moving out.
Commonly referred to as the seller of a property.
Homes built between 1837 and 1901 during the reign of Queen Victoria. They are one of the most common types of period property in the country. Typical features including red brick façades, bay windows and fireplaces with cast iron hearths.