Glossary
UK Property Glossary
Plain-English definitions of the terms you'll encounter when buying, selling, or renting property in the UK.
A
- AIP (Agreement in Principle)
- A conditional indication from a mortgage lender of how much they may be willing to lend you, based on a soft credit check. Also called a Decision in Principle (DIP) or Mortgage in Principle (MIP). Not a guarantee of a mortgage offer — the lender will carry out full checks before making a formal offer.
- Read guide →See also: Mortgage Offer, LTV (Loan to Value)
- Assured Tenancy
- A type of tenancy that gives the tenant greater security of tenure than an assured shorthold tenancy (AST). The landlord can only regain possession through specific legal grounds (such as rent arrears or property deterioration). Assured tenancies are relatively rare in the private sector — most private tenancies are ASTs.
- See also: AST (Assured Shorthold Tenancy), Section 21 Notice
- AST (Assured Shorthold Tenancy)
- The most common type of tenancy agreement in England and Wales. It gives the tenant the right to live in a property for a fixed period (usually 6 or 12 months), after which it typically becomes a periodic (rolling) tenancy. Landlords must follow specific legal procedures to end an AST.
- Read guide →See also: Section 21 Notice, Deposit Protection
B
- Base Rate
- The interest rate set by the Bank of England, which influences the rates that banks and building societies charge borrowers. When the base rate rises, variable-rate and tracker mortgage payments typically increase. Fixed-rate mortgages are not affected until the fixed period ends.
- See also: SVR (Standard Variable Rate), Tracker Mortgage
- Bridging Loan
- A short-term loan used to bridge the gap between buying a new property and selling an existing one. Interest rates are higher than standard mortgages and the loan is usually repaid within 12 months. Commonly used by chain-free buyers or property developers.
- See also: Chain, Mortgage
- Building Safety Fund
- A UK government fund to cover the cost of removing unsafe non-ACM cladding from residential buildings over 18 metres (roughly 6 storeys). Introduced after the Grenfell Tower fire. The Building Safety Act 2022 also protects qualifying leaseholders from remediation costs in many cases, shifting liability to developers.
- Read guide →See also: Leasehold, Service Charge
- Building Survey (Level 3)
- The most detailed type of property survey, recommended for older, unusual, or significantly altered properties. Provides an in-depth analysis of the property's condition, including structural issues, defects, and recommended repairs. More expensive than a HomeBuyer Report but much more thorough.
- Read guide →See also: HomeBuyer Report (Level 2), Valuation (Level 1)
- Buy-to-Let (BTL)
- A property purchased specifically to rent out to tenants. Buy-to-let mortgages have different criteria to residential mortgages — typically requiring a larger deposit (usually 25%+) and charging higher interest rates. Rental income must usually cover 125–145% of the mortgage payment.
- Use rental yield calculator →Read guide →See also: Rental Yield, SDLT (Stamp Duty Land Tax)
C
- Capital Gains Tax (CGT)
- A tax on the profit when you sell an asset that has increased in value. Your main home is exempt (Private Residence Relief), but CGT applies to second homes, buy-to-let properties, and inherited properties that are not your main residence. The annual exempt amount is £3,000 (2024/25). Rates are 18% (basic rate) or 24% (higher rate) for residential property.
- Read guide →See also: SDLT (Stamp Duty Land Tax), Buy-to-Let (BTL)
- CCJ (County Court Judgement)
- A court order issued when someone fails to repay money they owe. A CCJ stays on your credit file for six years and significantly affects your ability to get a mortgage. Some specialist lenders will consider applicants with CCJs, but at higher rates.
- Chain
- A sequence of linked property transactions where each sale depends on the next. For example, your buyer needs to sell their property to buy yours, and their buyer needs to sell theirs, and so on. Chains can slow down transactions and increase the risk of the sale falling through.
- Read guide →See also: Exchange of Contracts, Completion, Gazumping
- Chancel Repair Liability
- A historic legal obligation that can require property owners near certain medieval churches to contribute to the cost of repairing the church chancel. Liability can run to tens of thousands of pounds. Chancel repair liability searches (around £25) or indemnity insurance (around £20–£50) protect against this risk.
- See also: Conveyancing, Title Deeds
- CIL (Community Infrastructure Levy)
- A charge that local authorities can levy on new development to help fund infrastructure like roads, schools, and health facilities. CIL is calculated per square metre of new floor space. Some developments are exempt (self-builds, affordable housing, minor extensions). Not all councils have adopted CIL.
- See also: Planning Permission, Section 106 Agreement
- Commonhold
- An alternative to leasehold where flat owners jointly own and manage the common parts of the building through a commonhold association. Unlike leasehold, there is no freeholder and no ground rent. Rare in England and Wales — most flats are still sold as leasehold.
- See also: Leasehold, Freehold, Share of Freehold
- Completion
- The final stage of a property transaction when the purchase price is transferred, ownership passes to the buyer, and the keys are handed over. In England and Wales, completion typically happens 1–4 weeks after exchange of contracts. On completion day, the funds are transferred between solicitors.
- Read guide →See also: Exchange of Contracts, Conveyancing
- Conveyancing
- The legal process of transferring property ownership from one person to another. A conveyancer (solicitor or licensed conveyancer) handles searches, title checks, drafting contracts, and managing the exchange and completion process. Typical costs are £1,000–£2,500 including disbursements.
- Read guide →See also: Exchange of Contracts, Completion, Title Deeds
- Council Tax
- An annual local tax charged by your council to fund local services (waste collection, roads, schools, social care). The amount depends on your property's council tax band (A to H, based on 1991 property values) and your local authority's rate. Single occupants get a 25% discount. You can challenge your band if you think it's wrong.
- Use council tax lookup →Read guide →
- Covenants
- Legal obligations attached to a property that restrict or require certain actions. Restrictive covenants might prevent extensions, running a business, or keeping animals. Positive covenants might require maintaining a boundary wall. Covenants pass with the property and are legally binding on future owners.
- See also: Title Deeds, Leasehold
D
- Deed of Variation
- A legal document used to change the terms of an existing lease or agreement. In the leasehold context, a deed of variation might amend ground rent terms, remove restrictive clauses, or change permitted use. Both parties (leaseholder and freeholder) must agree, and the deed must be registered with the Land Registry.
- See also: Leasehold, Ground Rent, Covenants
- Deposit Protection
- A legal requirement in England and Wales for landlords to protect a tenant's deposit in one of three government-approved schemes (DPS, MyDeposits, or TDS) within 30 days of receiving it. Failure to protect a deposit means the landlord cannot serve a valid Section 21 notice and may face a penalty of 1–3x the deposit amount.
- Use deposit checklist →Read guide →See also: AST (Assured Shorthold Tenancy), Section 21 Notice
E
- Easement
- A legal right allowing someone to use another person's land for a specific purpose, such as a right of way or right to run services (pipes, cables) across it. Easements are registered on the title and pass with the property. They can affect your ability to build or develop.
- See also: Covenants, Title Deeds
- EPC (Energy Performance Certificate)
- A rating from A (most efficient) to G (least efficient) that shows a property's energy efficiency. Required by law when selling or renting a property. The certificate is valid for 10 years and includes recommendations for improving the rating. Properties rated F or G cannot legally be rented out without exemption.
- Use energy cost estimator →Read guide →See also: Building Survey (Level 3)
- Equity
- The portion of a property's value that you own outright — the difference between the property's market value and the outstanding mortgage balance. Equity increases as you repay the mortgage and as the property rises in value. Negative equity occurs when the mortgage is larger than the property's value.
- See also: LTV (Loan to Value), Negative Equity, Remortgage
- Exchange of Contracts
- The point at which both buyer and seller sign and swap contracts, making the sale legally binding. After exchange, pulling out incurs significant financial penalties (typically losing your deposit). The completion date is set at exchange. In Scotland, the equivalent is the conclusion of missives.
- Read guide →See also: Completion, Conveyancing, Gazumping
F
- First-Time Buyer (FTB)
- Someone who has never owned a property anywhere in the world. First-time buyers benefit from stamp duty relief (no SDLT on the first £300,000 for properties up to £500,000) and access to specific mortgage products and government schemes like the Lifetime ISA.
- Use stamp duty calculator →Read guide →See also: SDLT (Stamp Duty Land Tax), Lifetime ISA (LISA)
- Forfeiture
- The legal process by which a freeholder can terminate a lease and take back possession of a leasehold property. Grounds include non-payment of ground rent or service charges, breach of lease covenants, or subletting without permission. In practice, forfeiture is rare for residential leases and courts usually allow the leaseholder to remedy the breach.
- See also: Leasehold, Ground Rent, Service Charge
- Freehold
- Full ownership of both the property and the land it sits on, with no time limit. Most houses in England and Wales are freehold. As the freeholder, you are responsible for all maintenance but have no ground rent or service charges to pay (unless on a managed estate). The strongest form of property ownership.
- Read guide →See also: Leasehold, Commonhold, Share of Freehold
G
- Gazumping
- When a seller accepts a higher offer from another buyer after already accepting yours but before exchange of contracts. Legal in England and Wales (but not Scotland, where the system is different). You lose any money spent on surveys, searches, and legal fees. Consider gazumping insurance or a lock-out agreement.
- Read guide →See also: Exchange of Contracts, Chain
- Ground Rent
- An annual fee paid by a leaseholder to the freeholder for the land the property sits on. Under the Leasehold Reform (Ground Rent) Act 2022, ground rent on new leases must be set at a peppercorn (effectively zero). Existing leases with escalating ground rent clauses (especially doubling clauses) can be problematic.
- Read guide →See also: Leasehold, Freehold, Service Charge
H
- Help to Buy ISA
- A savings account (closed to new applicants since November 2019) where the government adds a 25% bonus when funds are used toward a first home. Maximum bonus is £3,000 on £12,000 of savings. Unlike the Lifetime ISA, the bonus is paid at the point of purchase through the solicitor, not into the account. Existing accounts can still be used until November 2030.
- See also: First-Time Buyer (FTB), Lifetime ISA (LISA)
- HMO (House in Multiple Occupation)
- A property rented to three or more tenants who form two or more separate households and share facilities like a kitchen or bathroom. Larger HMOs (5+ tenants) require a mandatory licence from the local council. HMOs must meet additional fire safety, room size, and facilities standards.
- Read guide →See also: Buy-to-Let (BTL), AST (Assured Shorthold Tenancy)
- HomeBuyer Report (Level 2)
- A mid-level property survey suitable for conventional properties in reasonable condition. Uses a traffic-light rating system (green/amber/red) to flag issues. Less detailed than a Building Survey but more thorough than a basic valuation. Typically costs £400–£700.
- Read guide →See also: Building Survey (Level 3), Valuation (Level 1)
I
- Interest-Only Mortgage
- A mortgage where your monthly payments only cover the interest — you don't repay any of the capital. At the end of the term, you must repay the full loan amount. Lenders require a credible repayment vehicle (investments, savings, sale of another property). Less common for residential mortgages since 2014.
- Read guide →See also: Mortgage, Equity, Remortgage
J
- Joint Tenancy
- A form of property ownership where two or more people own equal shares. If one owner dies, their share automatically passes to the surviving owner(s) — this is called the right of survivorship. Compare with tenants in common, where each person owns a specific share that can be left to someone else in a will.
- Read guide →See also: Tenants in Common
L
- Land Registry
- The government body (HM Land Registry) that records the ownership of land and property in England and Wales. Title registers and plans can be downloaded for £3. The Land Registry also publishes sold price data, which is available free of charge via their Price Paid dataset.
- Use sold price search →See also: Title Deeds, Conveyancing
- LBTT (Land and Buildings Transaction Tax)
- Scotland's version of stamp duty, charged on property purchases. Like SDLT, LBTT is progressive — you pay different rates on different portions of the price. Rates and thresholds differ from England. First-time buyers get relief on properties up to £175,000.
- Use stamp duty calculator →See also: SDLT (Stamp Duty Land Tax), LTT (Land Transaction Tax)
- Leasehold
- Ownership of a property for a fixed period, as set out in a lease. Most flats in England and Wales are leasehold. The leaseholder owns the property but not the land. Key considerations: lease length (below 80 years is problematic), ground rent, service charges, and restrictions on alterations or subletting.
- Read guide →See also: Freehold, Ground Rent, Service Charge, Share of Freehold
- Lifetime ISA (LISA)
- A savings account for 18–39 year olds where the government adds a 25% bonus on contributions up to £4,000/year (max bonus £1,000/year). Can be used toward a first home worth up to £450,000 or retirement at 60. Withdrawing for any other purpose incurs a 25% penalty — which means you lose more than the bonus.
- Read guide →See also: First-Time Buyer (FTB)
- Listed Building
- A building of special architectural or historic interest, protected by law. Graded I (exceptional), II* (particularly important), or II (of special interest). Any alterations — internal or external — require listed building consent from the local authority, on top of normal planning permission. Unauthorised alterations are a criminal offence.
- Read guide →See also: Planning Permission
- LTT (Land Transaction Tax)
- Wales's version of stamp duty, charged on property purchases. Administered by the Welsh Revenue Authority. Rates and thresholds differ from both England and Scotland. Higher rates apply to additional properties.
- Use stamp duty calculator →See also: SDLT (Stamp Duty Land Tax), LBTT (Land and Buildings Transaction Tax)
- LTV (Loan to Value)
- The ratio of your mortgage to the property's value, expressed as a percentage. For example, a £180,000 mortgage on a £200,000 property is 90% LTV. Lower LTV ratios unlock better interest rates. Key thresholds: 95% (maximum most lenders offer), 90%, 80%, 75%, and 60% (best rates).
- Use mortgage calculator →See also: Mortgage, Equity, Deposit Protection
M
- Management Company
- A company responsible for maintaining the common areas of a leasehold development — hallways, gardens, lifts, car parks, and building insurance. Can be a resident-run company (where flat owners are directors) or a professional property management firm appointed by the freeholder. Costs are recovered through service charges.
- See also: Service Charge, Leasehold, Share of Freehold
- Mortgage
- A loan secured against a property, used to fund the purchase. If you fail to keep up repayments, the lender can repossess the property. UK mortgages typically run for 25–35 years. The two main types are repayment (you pay off capital and interest monthly) and interest-only (you only pay interest, repaying the capital at the end).
- Use mortgage calculator →Read guide →See also: LTV (Loan to Value), AIP (Agreement in Principle), Mortgage Offer, SVR (Standard Variable Rate)
- Mortgage Offer
- A formal, legally binding offer from a lender to provide a mortgage. Issued after the lender's full underwriting process, including property valuation and credit checks. Typically valid for 3–6 months. Not the same as an Agreement in Principle, which is only indicative.
- See also: AIP (Agreement in Principle), Mortgage, Valuation (Level 1)
- Mortgage Overpayment
- Paying more than your required monthly mortgage repayment. The extra money reduces your outstanding balance, saving you interest over the mortgage term and potentially shortening it. Most lenders allow overpayments of up to 10% of the balance per year without early repayment charges.
- Use mortgage overpayment calculator →See also: Mortgage, Equity
N
- Negative Equity
- When the outstanding mortgage on a property exceeds its current market value. This can happen after a fall in house prices or if the property was purchased with a very high LTV. Being in negative equity makes it difficult to sell (you'd need to cover the shortfall) or remortgage.
- See also: Equity, LTV (Loan to Value)
- NHBC Warranty
- A 10-year structural warranty provided by the National House Building Council, commonly included with new-build homes. Covers major structural defects after the builder's initial 2-year defects period. Most mortgage lenders require an NHBC warranty (or equivalent) for new-build purchases.
- Read guide →See also: Building Survey (Level 3)
O
- Overage Clause
- A clause in the sale contract that entitles the previous owner to a share of any increase in the property's value if it is developed or has planning permission granted within a specified period (typically 15–25 years). Common when buying land or properties with development potential.
- See also: Planning Permission, Covenants, Title Deeds
P
- Party Wall
- A wall shared between two properties (semi-detached or terraced houses). The Party Wall Act 1996 requires you to formally notify adjoining owners before carrying out certain types of work on or near a party wall. Failure to do so can result in an injunction stopping the work.
- Read guide →See also: Planning Permission
- Permitted Development
- Building work or changes of use that can be carried out without needing a full planning application, within defined limits. Examples include certain extensions, loft conversions, and outbuildings. Rights vary by property type and location — flats, listed buildings, and conservation areas have restricted or no permitted development rights.
- Read guide →See also: Planning Permission
- Planning Permission
- Formal approval from the local planning authority to carry out building work, change the use of land, or make alterations that go beyond permitted development rights. Applications are decided against the local plan and national planning policy. Typical decision time is 8 weeks for minor applications.
- Read guide →See also: Permitted Development, Listed Building
R
- Remortgage
- Switching your mortgage to a new deal, either with your existing lender (a product transfer) or a different one. Most people remortgage at the end of their fixed-rate period to avoid reverting to the lender's SVR. The process is similar to getting a new mortgage but without the property purchase.
- Read guide →See also: Mortgage, SVR (Standard Variable Rate), Equity
- Rental Yield
- The annual rental income from a property expressed as a percentage of its value. Gross yield is simply annual rent divided by purchase price. Net yield deducts costs like mortgage payments, management fees, insurance, void periods, and maintenance. A common benchmark is 5%+ gross yield.
- Use rental yield calculator →See also: Buy-to-Let (BTL)
- Reserve Fund
- Money set aside by a management company or freeholder to pay for planned major works on a building — such as roof replacement, external repainting, or lift overhaul. Also known as a sinking fund. A well-funded reserve reduces the risk of large unexpected bills through special levies.
- See also: Sinking Fund, Service Charge, Leasehold
- RICS (Royal Institution of Chartered Surveyors)
- The professional body for property surveyors, valuers, and construction professionals. RICS sets the standards for property surveys (Level 1, 2, and 3). Using a RICS-accredited surveyor gives you recourse through their complaints and redress process if something goes wrong.
- Read guide →See also: Building Survey (Level 3), HomeBuyer Report (Level 2), Valuation (Level 1)
- Right to Buy
- A scheme allowing eligible council tenants in England to buy their council home at a significant discount (up to £96,000 in London, £127,900 elsewhere as of 2025). The discount depends on how long you've been a tenant. Housing association tenants may have a similar Right to Acquire.
- Read guide →
S
- SDLT (Stamp Duty Land Tax)
- A tax paid when you buy a property in England or Northern Ireland above a certain price threshold. SDLT is progressive — you pay different rates on different portions of the purchase price. From April 2025, the nil-rate threshold is £125,000 (£300,000 for first-time buyers on properties up to £500,000). Additional property surcharge is 5%.
- Use stamp duty calculator →Read guide →See also: LBTT (Land and Buildings Transaction Tax), LTT (Land Transaction Tax), First-Time Buyer (FTB)
- SDLT (Stamp Duty Land Tax)
- The formal legal name for stamp duty in England and Northern Ireland. SDLT is a progressive tax calculated on a tiered basis — different rates apply to different portions of the purchase price, similar to income tax bands. Often referred to simply as 'stamp duty' in everyday use.
- Use stamp duty calculator →Read guide →See also: SDLT (Stamp Duty Land Tax), LBTT (Land and Buildings Transaction Tax), LTT (Land Transaction Tax)
- Section 106 Agreement
- A legal agreement between a developer and the local planning authority, made under Section 106 of the Town and Country Planning Act 1990. These agreements require developers to provide benefits like affordable housing, public open space, or infrastructure improvements as a condition of planning permission.
- See also: Planning Permission, CIL (Community Infrastructure Levy)
- Section 21 Notice
- A notice a landlord can serve to end an assured shorthold tenancy without giving a reason (often called a 'no-fault eviction'). Two months' notice is required. The Renters' Reform Bill proposes to abolish Section 21 notices entirely. A landlord cannot serve a valid Section 21 if the tenant's deposit is not properly protected.
- Read guide →See also: AST (Assured Shorthold Tenancy), Deposit Protection
- Service Charge
- An annual charge paid by leaseholders to cover the cost of maintaining common areas of a building — cleaning, gardening, building insurance, lift maintenance, and major works. Charges vary widely (£800–£6,000+/year). Leaseholders have the right to challenge unreasonable service charges at a tribunal.
- Read guide →See also: Leasehold, Ground Rent, Sinking Fund
- Sinking Fund
- A reserve fund built up through regular contributions by leaseholders to cover future major works (roof replacement, exterior decoration, lift repairs). A healthy sinking fund means leaseholders are less likely to face unexpected large bills. Also called a reserve fund.
- Read guide →See also: Service Charge, Leasehold
- Snagging List
- A list of defects and unfinished items in a new-build property that need to be fixed by the developer. Common snagging issues include poor paintwork, gaps in sealant, scratched surfaces, faulty locks, and drainage problems. Buyers can compile their own list or hire a professional snagging inspector (around £300–£500).
- Read guide →See also: NHBC Warranty, Completion
- Sole Agent
- An arrangement where only one estate agent is instructed to sell a property. Sole agency agreements are typically cheaper (around 1–1.5% fee) than multi-agency (2–3%), but mean only one agent is marketing the property. Most agreements last 8–16 weeks with a notice period.
- SVR (Standard Variable Rate)
- The default interest rate a mortgage lender charges after a fixed-rate or discounted period ends. SVRs are typically 1–2% higher than the best available fixed rates and can change at any time at the lender's discretion. This is why most borrowers remortgage before their fixed deal expires.
- Read guide →See also: Base Rate, Remortgage, Mortgage
T
- Tenants in Common
- A form of property co-ownership where each owner holds a specific share (not necessarily equal). Unlike joint tenancy, there is no right of survivorship — each owner can leave their share to whoever they choose in their will. Common for unmarried couples, friends buying together, or unequal contributions.
- Read guide →See also: Joint Tenancy
- Title Deeds
- The official documents proving ownership of a property and land. Since 1990, most titles in England and Wales are registered with HM Land Registry digitally. The title register shows the owner, any mortgages, covenants, easements, and restrictions. Unregistered land must be registered on first sale.
- See also: Land Registry, Conveyancing, Covenants
- TPO (Tree Preservation Order)
- An order made by a local planning authority to protect specific trees or woodland. It is a criminal offence to cut down, top, lop, uproot, or damage a TPO tree without the council's written consent. Fines can be unlimited in the Crown Court. TPOs are registered as local land charges.
- See also: Planning Permission
- Tracker Mortgage
- A variable-rate mortgage where the interest rate tracks the Bank of England base rate plus a fixed margin (e.g., base rate + 0.5%). Unlike SVR, the margin is contractually fixed. Payments go up and down with base rate changes. Some trackers have a collar (minimum rate) or cap (maximum rate).
- Read guide →See also: Base Rate, SVR (Standard Variable Rate), Mortgage
V
- Valuation (Level 1)
- A basic assessment of a property's market value, typically carried out for the mortgage lender to confirm the property is worth what you're paying. Not a detailed inspection — it will not identify defects or structural issues. Some lenders now accept automated (desktop) valuations without a physical visit.
- Read guide →See also: HomeBuyer Report (Level 2), Building Survey (Level 3), RICS (Royal Institution of Chartered Surveyors)
W
- Wayleave
- A legal agreement granting a utility company (electricity, water, telecoms) the right to run services across your land. Unlike easements, wayleaves are usually personal agreements that can be terminated, though this can be complex and costly. Annual wayleave payments are typically small (£10–£50).
- See also: Easement, Title Deeds
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