Property jargon explained

Whether you're looking to buy or sell property for the first time, or have years of experience in the property market, you may find yourself confused by the jargon that's often used when buying or selling property. You are not alone - property market jargon really can be difficult to get to grips with.

In this article, we list common property jargon with an explanation under each about what it means.

An agreement in principle is the amount of money a mortgage lender estimates that they will lend you. You may also hear this referred to as a:

• decision In principle
• mortgage in principle
• approval in principle
• mortgage promise

APR refers to the total rate of interest you end up paying over the entire duration of your mortgage. Therefore, it includes all the varying rates of your mortgage over the mortgage term calculated to give you one figure.

Bank rate is the interest rate the Bank of England sets. It can also be referred to as the ‘base rate' and acts as a guide for the interest rate other banks charge.

A building survey can also be termed a full structural survey. It is a report detailing the physical properties of a property.

A chain is what describes when a party in a property transaction, such as a seller, is also a party in another ongoing property transaction. This means that the property transaction depends on other buyers and sellers to move forward. 

Therefore, when there is a chain there can be delays and often parties will wait until all parties throughout the chain are ready to move forward with the property transaction.

Commonhold is when a property owner has freehold of their property but there is also a system of ownership on the property. This is often because it is a property with a building such as a block of flats. All property owners in the system of ownership will maintain the overall upkeep of the entire building.

Completion, or the completion date, is when your property transaction is final and comes to an end. So if you're selling, this is when the money for the property transfers to you as the seller. If you are buying, it's when the property deeds and ownership pass to you. In the case of a mortgage, this is the date all conditions come into effect.

A conveyancer is a qualified specialist property lawyer who will help you when you buy or sell property. For example, they will check legal documents and carry out the tasks necessary for the property transaction. These tasks are part of conveyancing which is the legal part of property transactions.

Covenants are legally binding promises between the seller and buyer and can have a legally binding effect on the future owners of the property. Covenants can be positive and restrictive. 

Positives are when a party is required to do something. Where a covenant is a restrictive covenant, this means precisely that; it legally restricts you in what you do to the property. For example, not to:

• use the land in a specific way
• keep livestock on the property 
• post advertisements on the property apart from where they advertise the property

Deeds are legal documents that state the title or ownership of a property or of land. They may also state responsibilities regarding the property such as what is permitted and what is not permitted.

A deposit is an amount of money a purchaser pays on a property to secure it as theirs. When you hear the term deposit in property jargon it can mean one of two things. 

A deposit can be the amount of money a purchaser hands over to cover the shortfall between their mortgage and the price of the property they are purchasing, or it can be the money a buyer gives to the seller's solicitors as they exchange contracts.

When you buy or sell a property, your conveyancing solicitor will need to carry out various tasks which are charged to you at a cost. The payments they make for these are disbursements and will pay:

• the local authority
• for searches
• for land registry fees 
• for Stamp duty

An early repayment fee, also known as an Early Repayment Charge (ERC), is a fee you have to pay when you overpay on your mortgage or when you change to a different mortgage provider. It allows your mortgage provider to recover any lost interest as a result.

An EPC is a certificate which outlines the energy performance of a property. They are valid for ten years and if you sell your property, it is a legal requirement to have one.

Equity in a property is what the homeowner owns of the properties. It is therefore the difference between the value of your property on the market and how much you still owe your mortgage lender. What you do not own, so is not equity, is owned by your mortgage lender.

Exchange of contracts is where a buyer and seller have signed and swapped the contracts at which point the sale must go ahead and terms and conditions are binding on both parties. At this point, you will have agreed on a date for payment and the release of keys.  Exchange of change contracts happens when your solicitor has carried out all checks required and the terms and conditions have been agreed upon between the buyer and the seller.

A fixed rate is where your mortgage offers you an interest rate which will not change during a fixed term.

Freehold is where a freeholder owns the party as well as the land it is on. As an owner of a freehold, you can make any changes you want to paving planning permission allows.

Gazumping is when another buyer makes a better offer on a property you have had your offer already accepted on. This can occur because you have not yet got to the stage of exchanging contracts.

Gazundering is where a buyer has offered you a price for your property but then without any real cause, changes their mind and reduces it. This can occur before you exchange contracts.

Interest rates are a charge a person pays for borrowing money. It will usually be a percentage of the money they still own from a loan.

HM Land Registry is a governmental organisation where your register changes to registered titles to a party such as the ownership. You can also carry out a land registry search with the land registry to find out charges against a property, for example, an undisclosed second mortgage.

A leasehold property is one which the owner has the right to possess for a certain period. This is often 99 years following a lease extension. Where there is a leasehold there will be a freeholder who owns the leasehold property. You may refer to them as a landlord, and the leaseholder will pay the ground rent.

A mortgage is a type of loan taken to purchase a property.

If you have a right of way on a property it means that someone who doesn't own it still has a legal right to pass along it using a specific route.

If you are buying a new build property your developer may carry out minor work to the property before you move in. This is called snagging. For example:

• touching up paintwork
• appliance adjustments
• fixing faults.

This is a type of tax you pay the Government when you purchase a property which is worth a specific amount. For residential property, certain criteria will determine the rate of SDLT such as:

• Purchase price
• location

SVR is a rate of interest your mortgage provider sets. They charge you this rate after your initial mortgage deal is over which is usually around two to five years after you take out your mortgage.

Subject to contract means that a property transaction will only be legally binding on the parties once they have exchanged the contracts.

A surveyor is a specialised professional who can identify issues with a property which can include problems and benefits.

When a party owns an interest in property this is a legal right and is referred to as title to the property. For example, ownership of a property is title to the property.

A vendor is a person selling a property or selling land. So, vendor means the seller.

Homeward Legal has a wealth of experience in helping people like you with a range of conveyancing needs whether it be buying, selling or mortgaging property in the UK. We know all about conveyancing so it is a wise move to choose us. 

Selling a property, remortgaging your house or buying a new home are all important yet exciting moves, so you want to understand exactly what is going on throughout the process.  At Homeward Legal, whilst residential conveyancing is second nature to us, we are still mindful that this is not the same for everyone. Confusing property jargon can slow down your conveyancing process and cause you to wonder what step to take next. You can rest assured with our competent solicitors regulated for legal advice and conveyancing, we can confidently guide you through your property transactions. 

At Homeward Legal, we know that the property market can be confusing, leaving buyers a little fearful of it at times and property jargon doesn't help. Our mission, therefore, is to make your conveyancing simple, stress-free and of course good value. We will navigate the jargon for you and coordinate all parties involved to get things moving swiftly. 

For all your conveyancing needs contact Homeward Legal today at . You can write to us too by dropping us a message. We can also provide you with a fast quote online to give you an idea of how low-cost our services are. 

^{Last updated 07.11.23}