Estate Agent Jargon Buster - A to D

A

Administration/Application fee
This is a charge levied by the lender to cover the costs of processing a mortgage application or a fee paid by a prospective tenant to cover the costs of their tenancy application. If an application is not completed, the fee may not be refunded.

Advance
A Mortgage Loan.

Annual Percentage Rate (APR)
The APR is a compound interest rate figure used to compare different mortgages. Defined by law, it includes repayments on the loan plus any mortgage related fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing over the entire term and should appear on all mortgage illustrations.

Applicant
The person or party applying for a property to buy or to rent

Appraised value
The value of a property, as estimated by a surveyor.

Appreciation
The increase in the value of a property as a result of changes in market conditions.

Approved in Principle / Agreement in Principle
A certificate some lenders will give you showing the amount they will probably be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.

ARLA
The Association of Residential Letting Agent, the UK’s foremost professional body for letting agents.

Arrears
Any late or unpaid rent.

Asset
Any form of property owned by a person, including currency, stocks and enforceable claims against others.

Assignment
The transfer of ownership of an insurance policy or lease.

Assured Shorthold Tenancy (AST) agreement
The standard tenancy agreement normally used for residential lettings.

Auction
The sale of a property to the highest bidder.

B

Balance Outstanding
The amount of loan owed at a particular time

Base Rate
The interest rate set by the Bank of England is known as the Base Rate. This can change at any time. [View Base Rate Changes]

Beneficiary
The individual(s) designated to receive the benefits from a policy.

Break Clause
A date in the future agreed by both landlord and tenants whereby a lease can be terminated, normally either at half way or every 2 or 3 years

Bridging loan
A short term loan commonly used to cover or 'bridge' the overlap between the purchase of a new property and the sale of an old one.

Buildings insurance
An insurance policy that pays the cost of repair or rebuilding in the event your property is damaged or destroyed. Most mortgage lenders will require buildings insurance to be taken out as a condition of their loan

Building survey (formerly full structural survey)
A full inspection of the property, conducted by a chartered surveyor, who will write a detailed report setting out the soundness of a property and any property defects. Suitable for any house, particularly older properties and those that have been poorly maintained as well as properties that have been extensively altered or extended, or any property due to be altered or extended.

Buildings insurance
An insurance policy that pays the cost of repair or rebuilding in the event your property is damaged or destroyed. Most mortgage lenders will require buildings insurance to be taken out as a condition of their loan

Buy to Let
An investment where you buy a property – usually with a mortgage – and rent it out.

Buy-to-let mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out.

C

Capital
The amount of money either put into buying a property or the deposit placed on a property. Also known as equity.

Capped-rate mortgage
A capped-rate mortgage sets a maximum rate of interest that the lender can charge, but only for a specified period.

Cashback
Some lenders offer "cashback" on completion of your house purchase. This could be a fixed lump sum, or an agreed percentage of the mortgage loan. Remember to check whether there will be conditions attached.

Chain
The situation that occurs when a buyer is reliant upon completion of the sale of their existing property in order to complete on the purchase of the new property.

Check out
The process of checking a property after a tenant has vacated. Normally only done when an inventory was carried out at the start of the tenancy. The condition of the property and the contents is checked against the inventory and the report is used as evidence for the settlement of the deposit.

Closing Date
The date set for submission of offers when more than one party show interest in the property.

Commercial Property Market
Normally including warehouses, shops and offices

Commisssion
The estate agent's fee for selling the property.

Common areas
Areas of land or buildings, such as gardens, hallways, recreational facilities and parking areas, where more than one resident shares access.

Comparative search
A search that looks at the actual sale values of similar properties in the same area as your property. This search is normally carried out by a surveyor and should give an indicative sale price for a property.

Completion date
The completion date is the day on which money is transferred from the buyer's to the seller's solicitor. It is the date that the buyer becomes the legal owner of the new property.

Conditions of sale
The details that determine the rights and duties of the seller and buyer. These may be national, statutory or the Law Society's conditions.

Contents Insurance
Insurance against accidental damage or theft of all moveable contents of a home, including furniture, appliances and soft furnishings.

Contract
A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale

Contract race
When two parties have made offers on the same property, the vendor will sell to the first party to exchange contracts.

Converted flat
A flat or apartment that has been created by the subdivision of a larger property.

Conveyancer
A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.

Conveyancing
The legal process surrounding the transfer of ownership of a property from seller to buyer.

Conveyancer
Person other than and similar to a solicitor who may conduct the conveyancing.

Conveyancing fee
The charge made by a solicitor or conveyancer for undertaking the legal process necessary for the transfer of ownership of a property.

Council of Mortgage Lenders (CML) The Council of Mortgage Lenders devised the Mortgage Code to ensure lenders treat customers fairly.

Council Tax
Levied by local councils to cover the cost of local amenities and services. 

Covenant
A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.

Credit check
The procedure by which a check is made on the credit history of an applicant, usually conducted by one of the large dedicated credit rating agencies. The check will reveal history of credit card repayments, outstanding debts, arrears and County Court Judgments.

Credit history
A history of an individual's open and fully repaid debts. Checking a credit history helps a lender to assess the likelihood that a prospective borrower will maintain their mortgage repayments.

Critical Illness Cover
Pays out a lump sum if you are diagnosed with a specified critical illness listed within an insurance policy

 

D

Deeds
Legal documents assigning ownership of a property and/or land.

Deeds release or discharge fee
The fee charged by lenders at the end of a mortgage term to cover the administrative costs of transferring the property ownership documents to the borrower.

Deferred period
A period of time that has to pass before benefit from a policy is claimed. Typically Income Protection policies will have a choice of deferred periods to suit any benefit you may be eligible for from your employer.

Deflation
A situation in which prices are falling (the opposite situation to inflation).

Deposit
Sum of money that represents the personal capital that the buyer is putting toward the purchase of the property or money paid by a tenant as security against any damage or breach of the tenancy agreement that occurs during the term of the tenancy.

Depreciation
The decline or reduction in the value of a property caused by changes in market conditions (the opposite of appreciation).

Detached
Term used to describe a property that stands alone and is separated from all others.

Development
A newly built residence or an older property that has been refurbished and modernised.

Disbursements
Fees paid by the buyer's solicitor on the buyer's behalf such as stamp duty, land registry and search fees.

Disbursements
Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor.

Discharge
Paying off a mortgage.

Discounted Variable Rate Mortgage
Mortgages charged at a rate discounted from the published bank standard variable rate for a set period of time. The rates are variable and are subject to go up or down in line with any changes to the Bank of England base rate.

Down valuation
When the lender restricts the amount you can borrow after the surveyor's valuation report indicates the property is not worth the sum sought.

Draft contract
Preliminary version of the contract.