PROPERTY JARGON AND GLOSSARY
Moving home is something you won’t do every day and therefore some of the terms and phrases that you will come across may be confusing. Below is a list of some of the most common terms used that you may find helpful:
Capital gains tax – you may have to pay capital gains tax if you make a profit (“gain”) when you sell a property that is not your principal residence, for example:
- Buy to let properties
- Investment properties
- Business premises
Chain – A sequence of property transactions linked by a number of buyers and sellers who are reliant upon each other for the sale and purchase of their properties.
Completion date – The date when either the sale or purchase of a property is legally completed.
Completion statement – A statement produced by your solicitor/conveyancer detailing the finances of the property transaction, including costs.
Contract – A legally binding agreement detailing the terms of a sale or purchase. The sellers solicitor/conveyancer will draw up two copies of the contract and each party will sign their own copy. When both parties are ready to legally commit, the two signed contracts are exchanged.
Conveyancer – A property lawyer who acts on behalf of a buyer or seller during the sale process. This can be a solicitor or licensed conveyancer.
Deeds – Title document which shows historical details of a property and evidencing a persons legal ownership.
Deposit – The amount paid by a buyer on exchange of contracts – usually 10% of the purchase price and only refundable in exceptional circumstances.
Disbursements – Out of pocket expenses paid by the buyer to their solicitor/conveyancer, such as stamp duty, search fees and Land Registry charges.
Easement – A right given to a home owner over an adjoining property ie a right of way.
EPC – Energy Performance Certificate. A report carried out to assess the energy efficiency of a property, required by all vendors if their property is to be marketed.
Equity – The balance of any money between the value of your property and any loans and costs to be repaid to a lender in the event of a sale ie mortgage or secured loan.
Exchange of contracts – The point at which the sale/purchase of a property becomes legally binding.
Fixtures & Fittings – A list of items at a property which are either included or excluded from a sale or that are available to purchase by way of separate negotiation.
Freehold – permanent or absolute ownership of land or property.
Gazumping – when a house seller accepts a higher offer from another buyer after an earlier offer has been accepted, subject to contract.
Ground rent – rent paid under the terms of a lease by the owner of a property to the owner of the land on which it is built.
Indemnity insurance – An insurance policy taken out to cover potential losses for something which may prevent a buyer from being in a position to use or enjoy a property to its full potential ie there may have been building works carried out without obtaining planning permission or building regulation approval.
Land Registry – A Government department that stores records of land/property ownership.
Land Registry fees – Fee paid by a buyer to register ownership of land/property with the Land Registry.
Leasehold – If you buy a leasehold property, you own the property for a set number of years but not the land that it is built on.
Mortgage – A loan for the purchase of a property, which is secured against the property. The lender will have a legal right over the property in case of default of repayments.
Negative equity – This is where the value of your property falls below the amount of mortgage that you have outstanding against it.
Searches – checks undertaken by a buyers solicitor/conveyancer to ensure that there are no onerous matters affecting a property ie road widening schemes, planning applications, old mine shafts, etc.
Stamp Duty Land Tax – a Government tax payable by a homebuyer who purchases a property over £125,000.
Subject to contract – a provisional agreement between a seller and a buyer, that is not legally binding.
Tenure – The conditions under which land or property are held or occupied ie Freehold, Leasehold.
Title – The legal right to ownership of a property or land.
Transfer document – The final legally binding document that transfers a property from a seller to a buyer.
Vendor – The person who is selling a property.
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