House Buying Terminology

Getting confused by technical terms and property jargon? Don't worry, we've got a glossary of all the house buying terminology from A - Z to help you out

Angela Kerr Director, Editor

Here’s our A-Z of useful terms that you’ll come across when buying and selling a house. Whether you’re looking to understand a specific term, get an overview of  house buying terminology or start your research into a particular topic, hopefully this will help.

• Advance – another term used to describe your mortgage loan.
• APR (annual percentage rate) – the total cost of your mortgage loan, including all costs, arrangement fees and interest charges, which is then shown as a percentage rate so you can compare this like for like with other rates
• Auction – If you’re looking for a speedy sale and certainty that a buyer won’t pull out of the purchase, then property auctions are a good way to go. Once the hammer falls, the buyer has to put down a 10% deposit, then they have a month to give you the remaining 90%.
• Balance outstanding – the total amount of the loan outstanding after a certain period of time
• Blight notice – a mechanism that can compel the local authority to buy properties on Compulsory Purchase terms
• Bridging loan – a short-term funding solution enabling you to ‘bridge’ two situations, for example a bridging loan might be used if you were purchasing a new build property but had yet to complete the sale of your current property
• Building insurance – cover taken out to rebuild your property from scratch should it be damaged by fire, thunder or lightening. The policy may also include insurance against other situations. Your lender might also ask to be noted on the policy as they’ll have an interest due to the mortgage they have provided to you. You must insure your new property from the point you exchange contracts, which is the time you become liable for the building.
• Buying agent – like estate agents but they act solely in the interests of the buyer. A buying agent’s job is to find their client the property that best fits what they are looking for. They will then negotiate the best price and terms. Read more about the costs and how to find one in our guide buying agents explained
• Buy-to-let – if you are buying a property to let out to tenants, or you plan to let your current home, you will need a buy-to-let mortgage, as well as checking you have the correct buildings and contents insurance cover.
• Capital gains tax – You may have to pay Capital Gains Tax if you make a profit when you sell property that’s not your home, for example a buy to let, business property or inherited property.
• Chain – a very common situation where other people are involved in selling their home at the same time as you, and therefore you’re all reliant on one another (called the chain) to complete the transaction. It would take just one of the party not to sell and another not buy, for the whole chain to collapse.
• Completion date – this is the point in the process where you actually own your new home. All funds have been transferred, paperwork completed and keys handed over, usually by the estate agent involved.
• Compulsory purchase orders – allow public bodies to force homeowners to sell up if their property obstructs a regeneration project or it’s for the “greater public good”
• Contents insurance – this is cover insuring all the movable contents inside your home against accidental damage and theft. Buildings insurance is taken out to cover the actual property.
• Contract – a Legal Agreement setting out contractual terms between the buyer and seller; it is drafted by a solicitor or conveyancer
• Conveyancer – an alternative to a solicitor, qualified to act in the sale or purchase of a property. Read how to find the right conveyancer
• Conveyancing – Refers to the legal process involved in property transactions. Find out more and compare conveyancing quotes on our site
• Council tax – This is the local authority charge for providing local amenities and services. Your property will be given a council tax band which determines how much you’ll pay, though you may be eligible for a council tax reduction
• Covenant – a condition contained with the lease that the buyer must comply with. Such a condition is normally passed on to subsequent owners for the duration of the lease period, subject to its wording. A restrictive covenant prohibits the owner from doing something.
• Deeds – a set of legal documents helping to define the ownership and boundary of property and land
• Deposit – the sum of money initially put down by a buyer when purchasing a property.
• Disbursements – this relates to fees which are normally shown separate to the standard legal fees charged by a solicitor or conveyancer in the purchase and sale of a property. This includes stamp duty, search fees, Land Registry fees etc
• Down valuation – when the surveyor acting for a mortgage company values the property for less than the price the buyer has agreed to pay
• Draft contract – this refers to an initial contract which is then edited to include the necessary information as required
• Early repayment charge – this refers to a charge made by a lender should you decide to pay a mortgage off earlier than the agreed repayment period. This could be either a flat percentage of the total loan or a fixed fee
• Energy Performance Certificate (EPC) – An EPC provides an energy performance rating for your home, with ratings varying from A (most efficient) to G (least efficient). It also gives recommendations of how to improve the home’s energy efficiency to save further money. An EPC is a legal requirement for a seller to provide to the buyer
• Equity – the difference between the mortgage owed on your home and the value of your property
• EWS1 – if you’re buying a flat this form is evidence that a building with potentially combustible cladding has had a fire safety assessment.
• Exchange of contracts – the point in the process of selling and buying a home when both parties become legally bound to complete the deal and can no longer change their minds without financial repercussions
• Fixtures and fittings – a description referring to non structural items that are included in a sale such as carpets and curtains
• Freehold – when you buy a property to own it and the land it is on, outright. Houses are more likely to be sold on a freehold basis
• Gazumping – when you’ve had an offer accepted on a property you want to buy, but the seller accepts a higher offer from another buyer
• Gazundering – a situation where a buyer decides to lower their offer just before exchange of contracts
• Gifted deposit – money given to a homebuyer to help them buy a property
• Green mortgage – Green mortgages reward you for saving energy in your property. Some lenders will give you lower interest rates or cashback and larger loans if your home meets a minimum energy-efficiency level. Other lenders will offer lower rates or cashback if you make energy-efficiency improvements. Or if you take out additional borrowing to pay for measures to improve your home’s energy efficiency.
• Ground rent – the annual fee received by a freeholder where the property is leasehold
• Guide price – a guide price is a general indication of the minimum the seller wants to achieve for the sale of their property.
• Homebuyer surveys (Level 2 RICS) – are a mid-level survey popular with most people buying a conventional property in a reasonable condition. They are less detailed – and less expensive – than RICS Level 3 Building Surveys but more comprehensive than RICS Condition Reports.
• Indemnity insurance – is a protection policy sometimes purchased during the conveyancing process. For a one-off payment, you get a policy that covers the cost implications of a third party making a claim against any defects with the property you are about to buy.
• IFA –Independent Financial Adviser. See our guide: Do I need an independent financial adviser?
• Interest only mortgage – a mortgage where only the interest on the loan is paid each month. You will need to arrange a savings scheme so that you can pay back the capital amount borrowed at the end of the loan term
• Joint tenancy – If you’re buying a house with a partner as joint tenants, you’ll both own the property equally – there are no separate, identifiable shares. You both share the financial obligations and any benefits of joint ownership.  Alternatively, you can opt to be tenants in common; you each own separate identifiable shares in the property. 
• Land Registry – the government body holding records of all registered properties in England and Wales
• Let To Buy – when you remortgage and release some cash to put down a deposit on a new home. You then let out your current home and use the rental income to cover the mortgage on your existing home.
• Leasehold – a leaseholder owns the property and its land for the length of the lease agreement with the freeholder. Flats are more likely to be sold on a leasehold basis. During the period of ownership, they’ll pay ground rent and possibly also service charges for the maintenance of the building and land. When the lease ends, ownership returns to the freeholder unless the lease is extended. Leases are normally granted for 99 years, but you may want to extend it at the point of purchase if there is a shorter amount of time remaining on the lease
• Maintenance or service charge – the charge for the upkeep of a leasehold property. This is more common in blocks of flats or apartments, with the charge normally apportioned to the number of units within
• Mortgage deed – a legal document relating to and acknowledging, the Mortgage lender’s interest in the property
• Mortgage guarantor – someone – typically a parent – who takes on some of the risk of the mortgage by acting as a guarantor.
• Mortgage offer – a formal written offer to you from a bank or building society to lend an approved amount against a property
• Mortgage valuation survey – When you apply for a mortgage your lender will commission a mortgage valuation, also known as a valuation survey, to assess whether the house is worth what you’re planning to pay for it.
• Offer – an offer made by a prospective buyer to purchase a property. At this point the offer is not legally binding
• Offers over – offers over the price advertised are invited
• Offset mortgage –  a mortgage which is linked to a savings account. The balance on these savings are then used to reduce the interest charged against the mortgage (thereby saving money).
• Porting – transferring a mortgage from one property to another.
• Property – either your home, the property you’re looking to purchase or another dwelling
• Quick sale firm – A company that buys your house for cash,  at a discount from the full market value but guarantees a quicker sale
• Repayment mortgage – a mortgage where the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. The amount borrowed decreases throughout the term and by the end of the loan term has been fully repaid
• Retention – where the lender holds part of the mortgage advance back until specified repair works to the property have been completed
• Sale agreed – the seller has verbally agreed to the offer made
• Sealed bids – potential buyers are invited to submit their offer in a sealed envelope by a particular date and time. No bidder knows how much the other participants have bid. All bids are placed at the same time and the highest bidder is usually the winner.
• Searches – these are checks on local authority records to show up planning applications, highways, restrictions and land charges. Further searches may be requested by a solicitor such as chancel (a legal obligation to pay for repairs to the parish church), utilities, drainage etc. if they feel this is appropriate. Your solicitor may ask for payment for searches in advance
• Shared ownership – where you buy a stake in a property, while paying rent on the remaining share to the housing association or private developer that own the building, making the cost of owning more affordable.
• Solicitor – a legal expert regulated by the Law Society, who is able to act for the purchase or sale of a property
• Stamp duty – tax paid to the government on the purchase of a property. The fee that’s actually paid can vary as it’s based on a percentage of the purchase value of the property. It is payable at the point of completion
• SSTC – sold subject to contract means the seller of a property has accepted an offer from a buyer but the agreement isn’t yet legally binding
• Survey – a property inspection carried out by a qualified surveyor. The mortgage provider will insist on a survey/valuation by a surveyor of their choice, but you can opt for the surveyor to do a more in-depth survey than the mortgage company needs. You can also arrange your own survey in addition
• TA6 form – The TA6 form is produced by the Law Society and covers 14 separate subjects with questions to be answered by the seller. It is designed to give the buyer important information about the property.
• Tenants – people living in a property owned by someone else
• Tenants in common – If you are buying a house with friends, you will likely take out a joint mortgage as tenants in common. Up to four people can be tenants in common for an individual property and tenants in common don’t have to own equal shares of the property. They can each act individually, which means they can leave their share to a beneficiary in their will. 
• Tender – the seller invites written offers for a property, which have to be received by a set closing date
• Title – this indicates who the legal owner is and is normally attached with the title deeds. If the property is registered, then a copy of this document can be obtained from Land Registry
• Under offer – when a seller has accepted an offer, but contracts are yet to be exchanged
• Variable interest rate – a rate of interest rate that fluctuates over time in line with general interest rates
• Vendor – another name to describe the seller