Jargon Buster

Welcome to the Just Do Property Jargon Buster……A complete glossary of terms that you need to know when you’re involved with property! Browse the list below, Select a Letter or use the Search Facility.

Jargon Buster Index

A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|Q|R|S|T|U|V|W|X|Y|Z

Accelerated Possession Procedure

Known as: APP

A way for landlords to gain possession of their property, that is straightforward and cheap, without a court hearing. The court makes its decision based solely on documents provided by the landlord and tenant, but can decide a hearing is necessary.

This procedure can only be used where there is a written tenancy agreement and the tenant has been given notice. The procedure cannot be used to claim for arrears of rent.

Also see: Discretionary Grounds For Possession, Grounds For Possession, Mandatory Grounds For Possession, Possession

Acceptance

If you wish to accept the lenders mortgage offer you need to sign their acceptance document and send it back

Accrued Interest

Interest charged but not yet paid.

Acquisition Costs

The monetary costs involved in purchasing a property, other than the purchase price e.g. Solicitors disbursements, Fees etc

Additional Security Fee

Fee charged upfront by lenders in order to protect themselves against a borrow defaulting on the loan. This fee is usually charged on mortgages over 75% LTV. Also know as : Mortgage Indemnity Guarantee (MIG) or a Mortgage Indemnity Premium.

Adjustable Rate Mortgage

Known as: ARM

A mortgage that consists of two terms, the first of which has a fixed rate of interest, and the second an adjustable rate.

Administration Fee

Fee you pay to a company for the administration/setup of a service or product. All regulated firms must give details of all fees before you buy a service or product.

Advance

The amount of money that your lender is prepared to lend you

Adverse Credit

Refers to people with a poor credit history. May include but is not limited to, things such as county court judgments (CCJ's), bankruptcy, mortgage arrears, Individual voluntary agreements (IVA's) and credit card or other borrowing arrears or defaults

Agent

Person/company or organisation that has been appointed to acts on behalf of a landlord, i.e. letting agent, management agent or

Agreement In Principle

Known as: AIP

The likely outcome of a loan application and first step in obtaining a mortgage. Not a formal offer, but includes a credit check with a credit reference agency and an assessment of your ability to repay the loan amount requested.

Also known as 'Decision in Principle'

Also see: Decision In Principle

Agricultural Covenant

A very specific planning condition that allows for the building of a residential dwelling, on the condition that it is occupied by a person employed or associated with working the land.

Annual Equivalent Rate

Known as: AER

The interest paid from current, deposit or savings accounts

Annual Percentage Rate

Known as: APR

The finance charge of borrowing expressed as an annual rate. Must be shown on all UK loan advertisements.

APR generally represents the Nominal APR, the interest charges for a year

Effective APR (also called EAR) is the fee + compound interest rate, where the fee s can vary.

Appraisal

Act of determining the current value of your property. Usually performed by an estate agent when you are selling your property.

Also see: RICS Valuation, Valuation

Appreciation

An increase in the value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.

Arrangement Fee

Fee charged by lenders for arranging the mortgage/loan. May be payable in advance or added to loan.

Also see: Booking Fee

Assignable Contract

A contract that allows you to sell on a property before the completion date. i.e. Assign the contract to a third party

Assignee

The person to whom an agreement or contract is assigned.

Assignment

This is when the ownership of a property is transferred from one person to another.

Assignor

The party who is assigning or transferring something to another

Association Of Residential Letting Agents

Known as: ARLA

Professional association for letting agents which operates code of practice and bond scheme that protect the clients of it's members.

Assured Shorthold Tenancy

Known as: AST

A form of tenancy that assures the landlord right to repossess the property at the end of the term specified in the tenancy agreement, which can be for any length of time.

To gain possession the landlord must service a notice under section 21 of the Housing Act 1988 giving a minimum of two months' notice.

Any new tenancy started after 28 February 1997 is automatically an assured shorthold tenancy unless otherwise specified.

Assured Tenancy

Known as: AT

A form of tenancy introduced under the 1988 Housing Act for properties let out as a separate dwelling and used as the tenant's only or main home.

An assured tenancy will generally allow the tenant to stay in occupation until either he or she decides to leave of the landlord obtains a possession order.

Auction

This is a means of buying a property in a quick and open way where potential buyers make opposing bids. Each property in the auction is assigned a Lot number. In an

BACS

Also see: CHAPS

Bank Of England

Known as: BoE

Central bank of the United Kingdom. Issues banknotes, and sets interest rates and monetary policy via the MPC.

Bank Of England's Monetary Policy Committee

The Committee that controls the setting of the Bank's Base Interest Rate, although the Government has the power to give instructions to the Bank on interest rates for a limited period. It meets monthly.

The rate set is the ?Repo' rate ? the base rate which sets a benchmark for other interest rates, including personal loan and mortgage interest rates.

Banker's Automated Clearing Service

Electronic funds transfer which is free of charge and takes 3 days -> They are entered into the system on the first day, processed on the second day, and cleared on the third day.

A Faster Payment alternative is also available that can be instant but may have to be requested depending on the bank, sometimes referred to as FastPay

Bankers Draft

A physical document like a cheque, however the money has already been debited straight from the account. The person receiving the bankers draft is therefore confident the money is safe and does not have to wait for clearing.

There is normally an administration fee to obtain a bankers draft, as well as you having to give a notice period, normally of at least 24 hours.

Base Rate

This rate is set by the Bank of England and is used as a benchmark for lenders to set interest rates by. It represents the lowest rate of interest a bank will charge you when it lends you money. It is reviewed monthly and can go up and as well as down.

Also see: Interest Rate, Mortgage Rate, Repo Rate

Below Market Value

Known as: BMV

The purchase price agreed below the market value or the property, usually expressed as a percentage, 20%, 25% or 35% Below Market Value.

The Value could be vendor, estate agent or RICS surveyor valuation, however the true BMV will be off the RICS valuation only.

Also see: Market Value

Beneficial Owner

This is the person owning land and who is therefore entitled to it for his/her own benefit. This is different from say a trust etc that may hold land for the benefit of someone else

Beneficiary

One who benefits from another, such as the act of invoking an insurance policy or deed of trust.

Benefit Overpayment

Is a deduction from existing housing benefit payments and used to recover payment from tenants. Such recoveries can impact upon rental income, creating a shortfall if such benefits are paid direct to landlord.

Block Management

This refers to the agents that manage/act on behalf of the freeholds and leaseholds, normally for a block of flats or apartments.

They will usually arrange things like:

building insurance
tending the gardens
general cleaning and re-decoration of shared areas

Also see: Service Charge

Booking Fee

Another term meaning arrangement fee. Booking fees are normally paid upfront to book the rate.

Also see: Arrangement Fee

Break Clause/Release Clause

Clause within a contract that allows the exit of that contract, normally with stipulations. These are sometimes used in conjunction with fixed term tenancies and will normally allow either party to get out (normally with about 2 months notice) before the end of the new term.

For example: in an AST after the first 6 months is over when it comes to renewal, either party (landlord or tenant), will often request that a break/release clause be entered into the agreement, if they are unsure whether they will want to continue renting the property for the duration of the next 6 months.

Bridging Loan

This is a temporary short term loan that enables you to buy a property and bridges the gap between the purchase of one property and sale of another. It should not replace a normal mortgage as the fees and interest are high.

Broker

This is a person that advises on mortgages (aka Mortgage Broker), or potentially any other financial product.

Also see: Mortgage Broker

Building Insurance

Insurance that is required to cover against your property being damaged or destroyed. The sum insured covers the estimated cost of rebuilding the property. (keep in mind this can vary greatly from the market value of the property.)

Also see: Contents Insurance, Landlord Insurance

Building Regulations

Legislations that relate to the standards of premises or construction. One or more could apply at any given time and set out the requirements with which the individual aspects of building design and construction must comply in the interests of the health and safety of building users, energy conservation, and access to and use of buildings

Building Society

Financial institution, owned by its members, offering banking, other financial services and Mortgage lending

Buy To Let

Known as: BTL

The purchase of a property for the sole purpose of letting for a rental income.

Buy To Let Mortgage

A special mortgage product for where it is intended to let the property out to tenants. This type of loan is may be based on projected rental income, rather than on multiples of the borrower's income or salary.

Buy To Sell

Known as: BTS

Property investment strategy. Purchase of a property with the aim to sell for profit, normally in a short space of time. This usually involves some level of refurbishment.

Capital

Accumulated wealth; normally referring to the Value of a Property minus any loans/mortgage secured against it.

Capital And Interest Mortgages

the capital and interest elements of the loan are paid off with each monthly instalment, so that the balance reduces over time. Also known as a capital and interest mortgage.

Also see: Repayment Mortgage

Capital Appreciation

How much the property is likely to increase in value over the course of 12 months.

Capital Expenditure

Cash outlay or Investment in permanent assets such as land & property

Capital Gains Tax

Known as: CGT

A tax payable on the capital of an asset when taken as profits. Only relevant to property other than you own home.

Capital Repayment

There are 2 ways of repaying a mortgage; capital repayment or interest only.

With a capital repayment mortgage, the capital and interest elements of the loan are paid off with each monthly instalment, so that the balance reduces over time. At the end of the mortgage term the balance will be nil

Also see: Interest Only Mortgages, Repayment Mortgage

Capital Rest Period

This is to do with the regularity with which the Lender calculates the outstanding balance on any given mortgage and hence the size of the monthly repayments. This figure is normally calculated annually, monthly or daily.

Capped Rate

The rate of interest your lender agrees will be the maximum during a specified period of time. This is period of time is often the first 1-3 years of the mortgage starting, but it can be for longer.

Also see: Capped Rate Mortgage, Rate Cap

Capped Rate Mortgage

A Mortgage product that has a capped rate applied, therefore the interest will have a maximum it can be during a specified period of time. During the capped rate period the interest rate can fall below the capped rate but will never rise above it.

Also see: Capped Rate, Fixed Rate Mortgage, Rate Cap

Cash Back Mortgage

A mortgage where the lender will refund back a sum of money to the borrower. This will normally be refunded back on completion and will either be a percentage of the load or a flat figure and normally means the borrow is tied in, either to a duration, rate or both.

Also see: Cashback

Cash On Cash Return

Known as: COCR

Ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage

Cashback

Known as: Cash Back

Rebate to purchaser upon completion of a sale

Also see: Cash Back Mortgage

Cashflow

The net disposable income from an investment, determined by deducting all operating and fixed expenses from the gross income. When expenses exceed income, a negative cash flow results.

Chain

In property, a chain refers to a sequence/chain of buyers and sellers all trying to buy a property while at the same time potentially trying to sell their own property.

Chain Free

This is simply when the owner of a particular property does not need to sell their own in order to buy a new property; hence they are ?chain free.? First time buyers are often chain free.

CHAPS

Same day transfer of funds between accounts. A bank will charge a fee for this.

Also see: BACS

Charge

Recorded at the land registry, a charge registers a lender as a secured creditor and ensures they will be paid from the proceeds of the sale of the property in the event of the property owner defaulting on the loan.

This is occurs when a property owner has used his property as security against other borrows such as a loan.

Charge Certificate

This is a certificate issued to the lender by the Land Registry that gives evidence of the lender's charge over the property.

Chief Rent

Payment made on freehold land to the original freeholder forever. This differs from ground rent because ground rent normally has a limited period.

Collateral

Anything, including property, used as a guarantee that you will be able to pay the lender the loan. If you aren't the collateral/property could be sold by the lender in order to recoup the money they originally paid you.

Commission

Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.

Commonhold

Form of tenure created by Commonhold and Leasehold Reform Act 2002 in which leaseholders in a property jointly hold the freehold through an association.

Company Let

A let of your property to a company/business for use by any member of their staff.

Comparables

Details/prices of other properties used in an appraisal that are substantially equivalent to the subject property and used to evaluate an investment as part of an investors due diligence.

Completion

Final stage in buying a property, involves the transfer of the legal title of property from a seller to a buyer and the point at which any mortgage commences.

Compound Annual Growth Rate

Known as: CAGR

The year over year growth rate of an investment over a specified period of time

Compulsory Purchase Order

Known as: CPO

Allows certain bodies which need to obtain land or property to do so without the consent of the owner. Compensation will include the value of the property and costs of acquiring and moving to a new property.

Consumers, Estate Agents And Redress Act

Known as: CEARA

Government Act to make provision for the establishment of the National Consumer Council.

In order to make provision for the handling of consumer complaints by certain providers; to make provision requiring certain providers to be members of redress schemes in respect of consumer complaints; to amend the Estate Agents Act 1979; to make provision about the cancellation of certain contracts concluded away from business premises

Contents Insurance

Insurance you take out to cover the cost of your personal belongings, that are in your property, against anything detrimental that could happen to damage.

Also see: Building Insurance, Landlord Insurance

Contingency Fund

Sum of money set aside for emergency use, used to cover extra unplanned expenses

Contract

This is what both the buyer and seller sign and binds both parties to the sale of the house.

Contract Race

This is what sometimes happens when two potential buyers want to buy the same property. The seller will normally be the one to instigate the contract race but it can also be instigated by a buyer.

The winner of the race will be the first buyer to reach exchange of contracts.

Conversion

This is a flexible term in property and can mean such things as a house that has been converted into flats or a loft converted into a bedroom, as well as other things.

Conveyancing

Legal process in buying and selling a property and/or land.

Corgi

The Confederation for the Registration of Gas Installers, now named GAS SAFE

Also see: Gas Safe

Council Of Mortgage Lenders

Known as: CML

The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK. There are 11 million mortgages in the UK, with loans worth over

Council Tax

Tax levied on households by local authorities; based on the estimated value of the property and the number of people living in it

County Court Judgement

Known as: CCJ

A judgement for debt recorded at a County Court which will show up when a credit check is undertaken

Court Service

Publicly available service that provides online access to various forms that landlords may require when commencing proceedings for possession.

The website also has guidance on such subjects as dealing with squatters. Forms available to download include N5 for use in possession claims, and N5B for use in the accelerated possession procedure

Covenants

The covenants are the terms of any given tenancy agreement. They include any obligations or promises made by either the Landlord or the tenant. They are requirements by law on the owner of a property that they will either do or not do something with their property.

Credit Check

An enquiry on the credit history of an applicant, normally utilising the major credit reference agencies

Also see: Credit Reference Agency, Credit Report, Credit Score

Credit Reference Agency

Companies that can provide credit information about individuals (including CCJs) and confirmation of addresses included on the electoral register.

There are three nationwide private agencies that produce credit reports and credit scores on private consumers:,Eg. Equifax, and Experian.

Known as Credit Bureau in US.

Also see: Credit Check, Credit Report, Credit Score

Credit Report

A report from a credit reference agency that provides a credit score and other financial data: credit transactions, records of outstanding debts or bankruptcy.

Also see: Credit Check, Credit Reference Agency, Credit Score

Credit Score

A score assigned to an individuals credit standing, normally in the form of a number upto 999 which is seen as perfect credit score.

Also see: Credit Check, Credit Reference Agency, Credit Report

Credit Search References

These are references taken regarding a potential tenant. These references can be from sources such as the tenant's employer. A check of the tenant's credit history is also normally carried out.

Also see: Credit Check, Credit Report

Current Account Mortgage

A flexible/offset mortgage that can keep all your finances in one place. It combines your mortgage with a current account and the money in the current account can be automatically set against the mortgage balance and then interest only charged on the outstanding amount of the loan.

In practice this should mean that interest payments should be reduced.

Also see: Flexible Mortgage, Offset Mortgage

Decision In Principle

Known as: DiP

Deed

A written instrument that, when executed and delivered, transfers ownership of a property.

Also see: Deed Of Covenant, Deed Restriction, Title Deeds, Trust Deed

Deed Of Covenant

An agreement in a deed to transfer income from one person to another in a tax efficient way

Also see: Deed

Deed Restriction

Clauses in a deed limiting the future uses of the property. Deed restrictions may impose a vast variety of limitations and conditions, for example, they may limit the density of buildings, dictate the types of structures that can be erected or prevent buildings from being used for specific purposes or even from being used at all.

Also see: Deed

Default

This is when you have failed to make payments as you have agreed to. In property terms this is normally used when talking about missed payments on your mortgage.

Delayed Completion

Completion is classed as delayed if they take over 28 days to complete after exchange of contracts.

Also see: Exchange Of Contracts

Department Of Social Security

Known as: DSS

This department is now part of t he Department of Work and Pensions

Department Of Work And Pensions

Known as: DWP

Government department responsible for welfare and employment issues. Formally the Department Of Social Security

Deposit

Sum paid upfront before receipt of product/service. In Property either a lump sum paid to the seller towards the overall cost of the property and required for exchange of contracts, or the money provided by a Tenant to cover potential damages.

Deposit Protection Scheme

These schemes ensure that money paid by tenants as deposits are kept safe and a landlord must use either a custodial or insured scheme if they take deposits.

Also see: Deposit Protection Scheme, Security Deposit

Depreciation

Loss in value of an asset over its estimated useful life.

Disbursements

Disbursements are the term used to mean legal costs involved with purchasing a property.

Discounted Rate

An interest rate lower than the lender's Standard Variable Rate for a mortgage. This is normally discounted for a limited period and then will revert back to the lenders Standard Variable Rate (SVR)

Also see: Mortgage Rate, Standard Variable Rate

Discounted Tracker Rate Mortgage

This is a variable rate mortgage that is discounted from the Bank of England's base rate. It is usually discounted by a set percentage but will increase / decrease in line with the Bank of England's base rate.

For Example: If the Base Rate is 2% and the discount is 0.5%, the actual rate will be 1.5%. If the base rate increases to 3%, the actual rate will be 2.5%.

The discounted rate is normally for a set period of time and there are usually early repayment charges that will be charged if the loan is repaid within the discounted period.

Also see: Base Rate, Tracker Mortgage

Discretionary Grounds For Possession

Grounds that may be cited in possession proceedings which allow the court discretion as to whether or not to grant possession there are also eight mandatory grounds for possession.
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Also see: Accelerated Possession Procedure, Grounds For Possession, Mandatory Grounds For Possession

Down Payment

Amount of payment in cash by the purchaser to the lender.

Also see: Deposit

Due Diligence

Known as: DD

Activities you undertake to ensure that all is well with the property you are looking to purchase. This involves getting comparables for both rentals and property values in the area.

See http://www.justdoproperty.co.uk/due-diligence-in-15-minutes

Early Repayment Charge

Known as: ERC

A charge payable on some mortgages to cover administration costs in the event of a loan being repaid before the due date

Easement

A right, such as a right of way, which the owner of one property has over an adjoining property.

Empty Dwelling Management Order

Known as: EDMO

May be made by a local housing authority in respect of dwellings which are wholly unoccupied.

An interim EDMO is an order made by a local housing authority to enable it to take steps for the purpose of securing that a dwelling becomes and continues to be occupied.

A final EDMO is made in succession to an interim EDMO for the purpose of securing that a dwelling is occupied

Endowment Mortgage

An endowment life assurance policy is taken at the start of a mortgage. Throughout the term of the mortgage, payments made by the borrower cover only the interest due on the loan.

The capital sum borrowed is paid back in one lump sum at the end of the loan period, using the proceeds from an endowment policy taken out at the start of the mortgage

Also see: Mortgage

Energy Performance Certificate

Known as: EPC

Assessment of household energy usage.

Certificates give properties a rating from A to G and the extent to which this can be lowered if the recommendations of the Domestic Energy Assessor preparing the certificate are adopted.

Dwellings offered for sale must have an EPC that is not more than 12 months old, and from October 2008 rental properties must have a certificate that is not more than 10 years old.

Refer to our article for more information.

Equitable Interest

This is when someone has some legal rights to a property but these rights do not include the right to sell its legal title.

Equity

This is the difference between the market value of a property and the amount of the mortgage that is still owed to the lender on that property.

Equity Release

The act of releasing some of the equity, or the value you have built up in your home, without having to move out or sell it on the open market. Also used to refer to straightforward re-mortgaging, although there maybe other schemes available.

Also see: Equity

Escrow Account

A 3rd party bank account into which funds are paid, usually for the fulfilment of a mortgage or other contract.

Estate Agent

Known as: EA

Agent for the selling, renting or management of homes, land and other buildings

Estimated Restricted Realisation Price

Known as: ERRP

Money expected to be achieved within a short timescale from the sale of assets by auction, tender or private treaty. Crisis figure. Replaced forced sale value.

European Central Bank

Known as: ECB

The European Central Bank (ECB) is the institution of the European Union (EU) which administers the monetary policy of the 17 EU Eurozone members states.

The primary objective of the ECB is to maintain price stability within the Eurozone, or in other words keep inflation low.

Eviction

Legal process to oust a tenant for possession of property. In most cases it is illegal for a landlord to evict a tenant without a court order.

The Protection from Eviction Act 1977 also protects tenants against being forced to leave a property through harassment, such as threats or physical violence, or through withdrawal of services such as disconnecting the electrical supply or refusing to carry out vital repairs

Evidence Of Title

Proof of ownership of property; commonly a certificate of title, an abstract of title with solicitor's opinion.

Exchange Of Contracts

Point in the Conveyancing process where the buyer and the seller become legally bound to complete the sale. Both will then be committed to completing the transaction.

Also see: Delayed Completion

Exclusive Mortgage

Mortgage only available through a specific packager in conjunction with the Lender who is going to provide the funding.

Also see: Mortgage

Fair Rent

Rent determined by the Rent Service applicable to Regulated tenancies, set according to local market conditions but any increase capped, except where the landlord has made substantial improvements to the property, by a formula based on the rate of inflation.

Also see: Rent Service

FastPay

FastPay or Faster Payments Service (FPS) allows for payments from one bank to another bank virtually instantaneously.

Although not every banks offers this service, 95% of banks do.

Also see: BACS

Financial Services Authority

Known as: FSA

The Financial Services Authority has statutory responsibility for regulating the financial services sector including the sale of private homebuyer mortgages but not business or buy to let mortgages.

Fittings

Fittings are items that are not attached to the building or land and are not subject to the sale unless they are specifically included, carpets and curtains would normally be thought of as fittings

Fixed Rate Mortgage

Mortgage where the interest rate is fixed for an agreed period and it is unaffected by changes in the lender's variable rate. At the end of this period, interest on the mortgage will be charged at the lender's variable rate.

Also see: Capped Rate Mortgage

Fixtures

Items on a building or land that have become part of the building or land and are therefore included in the sale.

Usually physically fixed to the building such as shelves or fitted wardrobes. If it is firmly secured onto the land or house and cannot be removed without damage, then it qualifies as a fixture.

Flexible Mortgage

These are mortgages that allow you to pay them off in a flexible way, one example of this are mortgages that allow you to make overpayments so that you can pay off your mortgage early.

Also see: Current Account Mortgage, Offset Mortgage

Flip

To Purchase and then immediately sell a property.

Flying Freehold

A flying freehold is formed when part of a freehold property overlaps a different freehold property or land.

Fractional Ownership

Fractional ownership allows a collection of unconnected buyers to share title ownership of a property whilst benefiting from its use, rental returns and capital appreciation.

Freehold

Known as: FH, F/H

This is when you have ownership of a piece of land and the property that resides on it.

Full Structural Survey

The most comprehensive survey available which examines all aspects of a property. Normally reserved for properties of unusual construction and older properties that have been heavily extended.

Also see: Survey, Valuation

Gas Safe

Gas Safe maintains the register of competent gas installers, inclusion on which is a legal requirement for businesses and self employed people working on gas fittings or appliances.

Landlords are required to have gas appliances and flues checked annually by a Gas Safe registered engineer.

Also see: Gas Safety Regulations

Gas Safety Regulations

A landlord must make sure that a gas safety check is carried out prior to letting out any property.

Then it needs to be completed annually and a copy of the record must be given to the tenant. This check must be carried out by an authorised Gas Safe registered engineer.

Also see: Gas Safe

Gazumping

Gazumping is when a vendor accepts an offer from one person only to later reject it in favour of a higher offer they receive from someone else.

Gearing

Using a small amount of money to secure a larger investment. Also known as Leverage. E.g. Your deposit of 10-25% will secure you 100% ownership

Also see: Leverage

Gifted Deposit

Means that someone has gifted you the deposit on a property. Normally a developer on a new build property you are buying.

Good Repair

Landlords are required by law to keep their rented properties in good repair and fit for human habitation. Should local environmental health officers rule that a tenant's health has been affected by the state of living conditions, he or she would be able to claim compensation from your landlord

Grace Period

A period of time granted by a loan agreement during which default will not occur even though payment is overdue. Your contract may or may not have a grace period.

Gross Development Value

Known as: GDV

Final end value of a development or project before deductions

Gross Return On Capital Employed

Financial return = This is a measure of the efficiency of your investment in generating a return. It takes into account the amount of rent you receive minus the interest payments that you have to make. As interest rates change, this measure will also change and should be tracked closely.

Formula: (annual rent - annual interest) / (property purcahse deposit + acquisition cost)

Example: A property purchased at

Gross Yield

Financial return before expense deductions = Divide the annual rental figure by Property purchase price

Formula: (annual rent/(Purchase price))

Example: A property purchased at

Also see: Rental Yields, Return On Investment, Yield, Net Yield

Ground Rent

The amount payable annually by the leaseholder of the property to the Freeholder of the property. This may be paid monthly or annually.

Grounds For Possession

There are 17 grounds for possession laid down in the Housing Act 1988, as amended by the Housing Act 1996, that may be cited in possession proceedings against a tenant.

Eight are Mandatory grounds for possession where the court is obliged to award possession provided the landlord has complied with the procedure set out in the Housing Acts and has served the tenant with the appropriate notices.

Nine are Discretionary grounds for possession allowing the court some leeway. Landlords may also seek possession when it can be demonstrated that a tenant is no longer using the accommodation as his or her principal home.

Also see: Accelerated Possession Procedure, Discretionary Grounds For Possession, Mandatory Grounds For Possession

Guaranteed Rental Income

Amount of income guaranteed per year, make sure you are aware of who is the guarantor, for how long and that there is a contract in place

Also see: Guarantor

Guarantor

This is a person who agrees to guarantee that they will repay a loan or debt if you default on the payment of it. A typical example of this is when a parent guarantees the mortgage will be paid on one of their grown up children's first property purchases.

Harassment

Harassment is a criminal offence under the Protection from Eviction Act 1977.

The term refers to acts by a landlord or agent likely to interfere with the peace or comfort of a tenant or involve the withdrawal or withholding of services reasonably required for occupation. Harassment can include the landlord continually visiting the property or contacting tenants

Higher Lending Charge

Known as: HLC

A charge on a mortgage when the Loan To Value ration is higher than they are prepared to accept at the standard rate. Typically the charge is applied to loans in excess of 90%. Loan to Value.

HMO License

Known as: HMO Licensing

In England and Wales landlords must obtain licences from local authorities for HMO properties of three or more storeys with five or more occupants who form two or more households. Households being partners and relatives living together and using shared facilities such as kitchens and bathrooms.

The licensing process includes assessment of whether or not they are ?fit and proper' to be HMO landlords and apply adequate management standards.

In Scotland (as from 30 April 2006) all landlords must register with their local authorities under the Antisocial Behaviour etc. (Scotland) Act 2004. Letting property without registering could result in a fine of up to

House Of Multiple Occupation

Known as: HMO

In England and Wales HMOs are defined under the Housing Act 2004 as:

entire houses or flats let to three or more tenants from two or more households who share a kitchen, bathroom or toilet
houses converted entirely into bedsits or other accommodation that is not self contained, let to three or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities
converted houses containing one or more flats which are not wholly self contained, occupied by three or more tenants who form two or more households and who share facilities
buildings which have been converted entirely into self contained flats but the conversion did not meet the standards of the 1991

House Price Index

Known as: HPI

A House Prices Index measures the price of residential housing. In the UK there is no official HPI, instead various banks, building societies, property websites and the government maintain an Index. Below is a description of the mail indices:
- Rightmove: compiled from asking prices of properties as they come on the market via Rightmove's member estate agents over the previous month. Not seasonally adjusted.
- Halifax: based on mortgage approvals of loans agreed by Halifax Bank of Scotland over the previous month, seasonally adjusted.
- Nationwide: based on mortgage approvals of loans agreed by Nationwide Building Society over the previous month, seasonally adjusted.
- DCLG (Department of Communities and Local Government): measures prices at completion stage, not seasonally adjusted.
- Land Registry: uses sales data collected on all residential housing transactions, whether for cash or with a mortgage and is the only index based on repeat sales. It includes figures at national, regional, county and London borough level.
Housing Association

Housing associations offer housing t local people - often to people on a low income or people who need extra support.

Housing Benefit

Known as: HB

A means tested welfare benefit administered by the local authority providing eligible tenants assistance in meeting the cost of rent.

Helps tenants to pay their rent. All tenants, Council, Housing Association or private, are eligible to apply. How much help anyone receives depends on their income and other circumstances.

Also see: LHA

Housing Ombudsman

The Ombudsman can investigate complaints and other matters referred to them and make recommendations for action. They are independent of the people and organisations they investigate.

They are impartial. Tenants can refer matters to the Housing Ombudsman,

Income Multiples

These are the multiples that the Lender will apply to the borrower's income when trying to decide what the maximum they will lend them for their mortgage is.

Independent Financial Adviser

Known as: IFA

Someone that has undergone specific training and has obtained specific qualifications to become a financial adviser and to act independently without being tied to only recommending the products of any particular lender.

Instruction

When you give an estate agent or auctioneer the right to sell your property, defined by the agreement between you and them and the terms of sale.

Interest Charges

The fee charged for borrowing money

Interest Only Mortgages

There are 2 ways of repaying a mortgage; capital repayment or interest only.

Interest only mortgage is where you pay off the Interest on the mortgage loan only and are not paying off any of the loan itself. Often tied in with some other investment vehicle to cover the initial loan amount at the end of the mortgage term.

Also see: Capital Repayment

Interest Rate

The percentage of a loan paid, per year, by the borrower to the lender.

Also see: Base Rate, Mortgage Rate

Intestate

To die without leaving a valid will: opposite meaning is to die Testate.

Also see: Testate

Inventory

A detailed listing of the contents of a property. Includes things like kitchen utensils and garden equipment etc. as well as the condition a property is in and the structural fixtures, fittings and power points etc.

Investment

An outlay of cash or credit with an expected return.

However the outlay of cash is only a true investment where thorough analysis has taken to place. In not analysis has taken place, this is pure speculation of gambling.

Joint Agency

This is when you have instructed more than one estate agent to market your property. This can sometimes mean that you are paying higher commission fees because they are not your sole agent.

Also see: Sole Agency

Joint Tenancy

A form of co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship.

This means that if one owner dies the other automatically becomes the sole owner, irrespective of whether a will had been made which included the property.

Also see: Tenancy In Common

Joint Venture

Known as: JV

Where two or more parties decide to join for a particular activity.

This can be to share resources, assets or capital although is also widely used where parties bring different things to the venture. For example a Joint Venture maybe started where one party has the capital but no time and the other time and no capital.

Also see: Partnership

Key Facts Illustration

Known as: KFI

Document issued by Mortgage broker giving a full breakdown of the interest rate of the Mortgage and full cost of repayments over the term that has been chosen. Also highlights all other costs associated with the mortgage such as product fees payable by you

Land Registry

Official registry of property titles. The world's largest property database, listing

Landlord

Person, group or company that has the right to let that property to a tenant (person or business).

Landlord Accreditation

A growing number of local authorities are introducing voluntary private landlord accreditation schemes, as are universities for student lets, and landlord associations.

Generally landlords who belong agree to adhere to given standards in return for being able to say they are accredited

Landlord Insurance

Building and Contents insurance that is specific to the rental of property by a landlord rather than for normal residential living.

Also see: Building Insurance, Contents Insurance

Landlord's Energy Saving Allowance

Tax allowance originally introduced for Individual Landlords in April 2004 and which now covers loft insulation, cavity wall insulation, solid wall insulation, draught proofing, hot water system insulation, and floor insulation.

The allowance was extended to Corporate landlords in 2008.

Lease

A document which defined the agreement between an owner and tenants. It lists all the conditions which the leaseholder must abide by and also what the Landlord responsibilities are.

Lease Option

Known as: LO

A lease and an Option combines. The option provides the opportunity but not the obligation to buy a property or piece of land within a certain time. A down payment is required but maybe as low as

Leasehold

This is normally described as ownership of Land/property for a fixed period of time. This ownership is subject to the annual payment of ground rent to the owner of the freeholder.

Legal Fees

Fees charged by a solicitor or other qualified individual to carry out the legal work associated with buying a house.

Lender

Company or person who lends you money for a agreed time period. There will normally be interest charged and they will expect their money back within this period plus the interest.

LESA

Let To Buy

Obtaining a mortgage to purchase a new property to move into, whilst a previous property is let out to tenants. Retains original property as an investment with mortgage paid by tenant.

Leverage

To use a small amount of money to control a large amount of money/asset. In the UK this is normally referred to as Gearing.

Also see: Gearing

Libor

The London Inter Bank Offered Rate: the rate at which banks lend money to each other. LIBOR changes daily and a LIBOR linked mortgage will normally be adjusted every three months

Licence to Occupy

A shorter and more simple type of tenancy agreement that a standard commercial lease.

This type of tenancy does not create an interest in the property and so the tenant will have to accept that the Landlord can themselves enter the property at any time. The terms could also be extended to allow the landlord to occupy the property at the same time.

Also see: Tenancy At Will

Lien

A charge against income or a property making it security for the payment of debt.

Loan To Value

Known as: LTV

Percentage of the value of a property that will be lent via a mortgage.

Example:An

Local Housing Allowance

Known as: LHA

A government benefit that allows tenants fixed amounts to spend on housing dependent upon the local rental market, and permit them to keep any saving or to contribute an additional amount needed according to their choice of properties.

Payments are made direct to tenant rather than the Landlord.

Also see: Local Housing Authority

Local Housing Authority

Known as: Housing Authority

The authority within the local councils that manage the allowances and payments to claimants, along with the waiting lists and allocation of housing.

Also see: DSS, Local Housing Allowance

Local Search

Application to local authority for information about a particular property and its surrounding area which should reveal whether the property is affected by road building or outstanding matters such as sanitary notices

Also see: Searches

Managing Agent

A person/company appointed to act on behalf of the landlord, usually in collection of rents or maintenance of the property

Also see: Estate Agent

Mandatory Grounds For Possession

Grounds that may be cited in possession proceedings which, provided the correct procedures have been followed and notices given, require the court to grant possession.

In brief the mandatory grounds cover situations where:
- the landlord requires the property for personal occupation;
- a mortgage lender is foreclosing the mortgage;
- property let for a fixed period is required for return to holiday letting;
- an educational institution requires return of a student let;
- a religious body requires return of its property for an alternative tenant;
- the landlord wishes to demolish, reconstruct or redevelop the property;
- a landlord wishes to claim possession against the resident heir of a tenant who has died;
- and the rent is in arrears by eight weeks or more (two months if it is paid monthly, or one quarter if paid quarterly).
  
  Also see: Accelerated Possession Procedure, Grounds For Possession
  
  Market Value
  
  The value assigned to a property/land as driven by local, national and global economic forces. This is the maximum value a buyer is deemed willing to buy at and the lowest value a selling willing to sell.
  
  Also see: Below Market Value
  
  Monetary Policy Committee
  
  Known as: MPC
  
  Bank of England committee that sets UK base interest rates or Repo rate, and a benchmark for other interest rates such as personal loan, mortgage interest rates.
  
  The MPC meets monthly and comprises the Governor of the Bank, the two deputy governors, the Bank's chief economist, the executive director for market operations and four external members appointed directly by the Chancellor.
  
  Also see: Base Rate, Interest Rate
  
  Mortgage
  
  A loan used to purchase property. In reality it is a Deed pledging freehold or leasehold property as security for the loan (also called legal charge).
  
  If payments are not maintain as agreed the mortgagor will be able to claim the property and sell it on to recover the outstanding amount.
  
  Also see: Fixed Rate Mortgage, Flexible Mortgage, Interest Only Mortgages, Repayment Mortgage, Tracker Mortgage
  
  Mortgage Advance
  
  A mortgage advance is the total amount of loan actually provided to the buyer, by the lender.
  
  Mortgage Approval
  
  A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. The Mortgage Approvals released by the Bank of England is considered as a leading indicator of the UK Housing Market.
  
  Mortgage Broker
  
  An agent of one or more mortgage lenders. Brokers often have access to mortgage products unavailable on the open market. The broker may charge and/or receive a fee from the lender for this service.
  
  Also see: Broker
  
  Mortgage Offer
  
  The offer from a lender to actually provide you a loan and sets out the conditions by which it is offered.
  
  Mortgage Payment Protection Insurance
  
  Covers all or part of your monthly mortgage payment, plus an extra amount to cover mortgage related expenses, for up to 12 months should you lose your income through an accident, sickness or unemployment
  
  Mortgage Rate
  
  The interest rate to be applied to the mortgage loan.
  
  Also see: Base Rate, Discounted Rate, Interest Rate, Standard Variable Rate
  
  Mortgagee
  
  The lender of the loan in a mortgage agreement.
  
  Mortgagor
  
  The borrower of a loan in a mortgage agreement.
  
  MRICS
  
  Member of the Royal Institution of Chartered Surveyors
  
  NASARB
  
  National Association Sale and Rent Back
  
  National Approved Letting Scheme
  
  Known as: NALS
  
  A Government backed accreditation scheme which all letting and letting management agents can join.
  
  In doing so they agree to meet defined standards of customer service, to maintain necessary insurances to protect clients' money, and to have customer complaints procedures in place offering independent redress.
  
  National Association Of Estate Agents
  
  Known as: NAEA
  
  The largest professional estate agency organisation in the Uk and committed to raising professional standards across all aspects of the property market.
  
  National Federation Of Residential Landlords
  
  Known as: NFRL
  
  NFRL
  
  National House Builders Council
  
  Standard setting body and leading warranty and insurance provider for new and newly converted homes in the UK.
  
  Their 18,000 registered builders agree to comply with its rules and standards. An NHBC certificate gives substantial protection against building faults for 10 years.
  
  National Inspection Council For Electrical Installation Contracting
  
  Long established, independent consumer safety organisation and the electrical contracting industry's voluntary regulatory body for electrical safety matters.
  
  National Landlords Association
  
  Known as: NLA
  
  The largest UK association of private landlords, protecting and promoting their interests and providing membership benefits such as fact sheets, newsletters, insurance discounts, meetings and workshops, and favourable terms with selected suppliers of advice and services.
  
  Negative Equity
  
  When you owe more money to the lender than the actual market value of your property.
  
  Also see: Equity
  
  Negative Gearing
  
  This is when there is a shortfall in the amount of income a property brings in in comparison to the cost of the mortgage etc.
  
  Also see: Gearing
  
  Net Price Balance
  
  Proportion of surveyors reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted balance will be 25%). Reported by the Royal Institution of Chartered Surveyors on a monthly basis.
  
  Net Yield
  
  A way of determining the Return On Investment (ROI) of an investment.
  
  Financial return after expense deductions = Annual rent after deducting all expenses divided by the capital value.
  
  Formula: (annual rent - annual costs)/(Purchase costs))
  
  Example: A property purchased at
  
  Also see: Gross Yield, Return On Investment, Yield
  
  NHBC
  
  NICEIC
  
  No Money Down
  
  Known as: NMD
  
  When a property/land is purchased using a mortgage in a way that means no deposit it actually left in the deal.
  
  Notice To Quit
  
  Bringing a tenancy or a license to an end ( termination of the tenancy or licence ) requires that certain procedures are followed, depending upon the type of tenancy, for the action to be fully legal:
  - The serving of a notice to quit by either landlord or tenant (or licensee)
  - The serving of a notice of intension to seek possession by the landlord
  Also see: Grounds For Possession, Mandatory Grounds For Possession
  
  Off Plan
  
  Purchasing a property before it is built on the basis of the builder's plans.
  
  Offer
  
  This is when you make an offer for a property for the offer amount. E.g. you can offer the asking price for a property or as many property investors do you can offer below market price for a property.
  
  Also see: Below Market Value, Market Value
  
  Offset Mortgage
  
  A flexible mortgage that allows the borrowers balance of current and savings accounts to be offset (take away from) their mortgage debt for the purposes of interest calculation.
  
  The aim is to reduce the interest payments and could help reduce the mortgage quicker than the term. The lender normally charges higher interest for flexible mortgages.
  
  Also see: Current Account Mortgage, Flexible Mortgage, Offset Mortgage
  
  Option Agreement
  
  Provides the opportunity but not the obligation to buy a property or piece of land within a certain time. The vendor can't sell it to anyone else in that time.
  
  Other Peoples Money
  
  Known as: OPM
  
  Used in the context of using Other People's Money to invest in property. This is normally done to leverage their money against the skills that you might have.
  
  Also see: Joint Venture, Leverage
  
  Partnership
  
  An agreement between two or more entities to invest or go into business together.
  
  Also see: Joint Venture
  
  Passive Income
  
  Income received on a regular basis with little effort required to maintain it.
  
  Some examples are income generated from: - rent from property - royalties from publishing intellectual property - dividends and interest income and gains from sales of securities - pensions
  
  Per Calendar Month
  
  Known as: PCM
  
  Refers to the rental figure that a tenant would pay per calendar month.
  
  Periodic Tenancy
  
  A periodic tenancy comes into being when a landlord does nothing to reclaim possession at the end of an original assured shorthold tenancy and allows the tenants to remain without issuing a new tenancy agreement.
  
  The terms and conditions of the original assured shorthold tenancy agreement remain in place, as does the right of the landlord to bring the tenancy to an end by service of the required two month's
  
  Physical Deterioration
  
  A reduction in a value of a property resulting from a decline in physical condition either caused by action of the elements or by ordinary wear and tear.
  
  Planning Permission
  
  Permission from the planning department of a local authority to carry out approved works on a property. Includes:
  - extending a property
  - dividing off part of a property for business or commercial use or for a separate dwelling
  - using a building or caravan in a garden as a separate dwelling.
  - creation of a parking space for a commercial vehicle
  Minor changes are allowed without needing to apply for planning permission.
  
  Portable Mortgage
  
  A portable mortgage allows the borrower to move their mortgage from one property to another without penalty within an early repayment charge period. e.g.: if there are early repayment charges for the first 3 years on your mortgage, then if you wanted to move house after say 19 months and didn't have a portable mortgage, then you would have to pay the charges and then get a new mortgage product.
  
  Also see: Mortgage
  
  Portfolio
  
  A collection of securities or assets of an investor.
  
  Within property this will refer to the collection of residential and commercial property or land that a person has invested into in order to obtain a return.
  
  Possession
  
  When the Purchaser takes over legal control of the premises.
  
  Also see: Accelerated Possession Procedure, Discretionary Grounds For Possession, Grounds For Possession, Mandatory Grounds For Possession
  
  Preliminary Enquires
  
  The set of questions raised by the purchasers solicitor, sent to the vendor's solicitor to ask for clarification on any points about the property and the ownership of it by the vendor.
  
  Principal Private Residence
  
  Term used by tax authorities for owners main home. Exempt from capital gains tax when sold
  
  Principle Private Residence Relief
  
  Known as: PPRR
  
  Used to mitigate CGT on second homes. 2 year window to decide which of your properties is to be your PPRR in order to maximise the relief on the biggest gain from each residence.
  
  Private Rented Sector
  
  Known as: PRS
  
  Classification of UK housing tenure. Dwellings owned by Private landlords.
  
  Probate
  
  The official process of proving a will is valid and who inherits any assets.
  
  If the will involves a property, a probate valuation for inheritance tax can be obtained which is normally a negotiated value with the district valuer who represents the Inland Revenue.
  
  It is vital for a potential purchaser and the vendor to understand that the sale of a property in this situation cannot proceed to exchange until probate is granted.
  
  Property Investment Clubs
  
  Known as: PIC
  
  Partnerships of investors so they can take advantage of bulk purchasing power. Membership usually required. Massive negotiating power, are often able to purchase well below Market Value and in large multiples
  
  Quiet Enjoyment
  
  Allowing tenants ?quiet enjoyment' is an implied term within any letting agreement and affords tenants the right to uninterrupted use of the property during the course of their tenancy without interference from the landlord or the landlord's agents
  
  Rate Cap
  
  The maximum interest rate that can be charged during the life of the loan. Also can be the limit on the amount the interest rate can be increased each period in an adjustable-rate loan.
  
  Re-Mortgaging
  
  To replace an old mortgage loan with a new mortgage loan, normally increasing the size of the loan or changing lender.
  
  Also see: Refinance
  
  Real Estate
  
  A parcel of land and everything attached to it (US).
  
  Real Estate Investment Trust
  
  Known as: REIT
  
  A group of individuals who purchase certificates of ownership in a trust. The trust then invests the money in property/real estate and distributes the profits back to the investors free of corporate income tax.
  
  Redemption
  
  Paying off (redeeming) a mortgage, either at the end of the mortgage term or when you move to another property or switch to another lender
  
  References
  
  Check on a potential tenant's suitability to rent a property. Such things as contacting previous landlords, present employer and doing a general
  
  Also see: Credit Check, Credit Search References
  
  Refinance
  
  To replace an old loan with a new loan, normally to increase the size of the loan and therefore release equity.
  
  Also see: Equity, Re-Mortgaging
  
  Registered Rent
  
  Rent included on the publicly available Rent Register as determined by the Rent Service or Rent Assessment Committee recording the maximum that can be charged until a new determination is agreed or the tenant leaves
  
  Regulated Tenancy
  
  With Regulated tenancy the landlord or tenant can object to the rent assessed by the Rent Service.
  
  If so the case will be passed to a Rent Assessment Committee to decide the Fair rent. Tenants with assured tenancies may also apply to the RAC for a determination of the open market rent they should be paying.
  
  They may also apply if the landlord serves notice of a proposed rent increase. The rents they set will be the legal maximum that can be charged for one year from the date of the decisions, after which an application for an increase can be made. Relevant forms are available from the Rent Service website
  
  Rent
  
  A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties.
  
  Rent Assessment Committees
  
  Known as: RAC
  
  When a landlord or tenant of a Regulated tenancy has objected to the rent assessed by the Rent Service, the case will be passed to a Rent Assessment Committee to decide the Fair rent.
  
  Tenants with assured tenancies may also apply to the RAC for a determination of the open market rent they should be paying. They may also apply if the landlord serves notice of a proposed rent increase. Tenants with assured shorthold tenancies may also apply within the first six months of their tenancy.
  
  Rent assessment committees are made up of two or three people a solicitor, a property valuer and a lay person, all of whom are drawn from panels of people with appropriate expertise.
  
  There are 14 rent assessment panels in England and Wales appointed by the Government. The rents they set will be the legal maximum that can be charged for one year from the date of the decisions, after which an application for an increase can be made. Relevant forms are available from the Rent Service website
  
  Rent Officer
  
  Local authority official responsible for local housing allowance. He or she will usually rely on the local Rent Service to assess whether the rent being asked is reasonable or not, or whether the property is too large for the needs of the claimant
  
  Rent Service
  
  An executive agency of the Department for Work and Pensions which:
  - carries out rental valuations for local housing allowance purposes
  - makes fair rent determinations;
  - advises local authorities about the effects on rent of housing renovation grant applications by landlords;
  - carries out rental valuations
  - provides information, on a more informal basis, for a variety of customers within the public and private sector
  Also see: Fair Rent
  
  Rent To Buy
  
  An arrangement with a private landlord where the tenant is renting with the intention to purchase the property.
  [?more]
  
  Also see: Right To Buy
  
  Rental Agreement
  
  A
  
  Also see: Tenancy Agreement
  
  Rental Yields
  
  A way of determining the Return On Investment (ROI) of an investment, expressed as either the Gross Yield or Net Yield.
  
  Also see: Gross Yield, Return On Investment, Yield, Net Yield
  
  Repayment Mortgage
  
  The capital and interest elements of the loan are paid off with each monthly instalment, so that the balance reduces over time. Also known as a capital and interest mortgage.
  
  Also see: Capital And Interest Mortgages, Capital Repayment
  
  Repo Rate
  
  The rate set each month by the MPC as the benchmark for other interest rates, including personal loans and mortgages
  
  Also see: Base Rate
  
  Repossession
  
  Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default.
  
  Residential Property Tribunal Service
  
  Known as: RPTS
  
  An independent body which aims to provide a fair and accessible tribunal service to help landlords, tenants and leaseholders settle disputes about rents and about leasehold property.
  
  It's remit covers England and comprises five regional Rent Assessment Panels, each covering a different geographical part of the country - London; Southern England; Northern England; the Midlands; and Eastern England.
  
  Rent Assessment Panels do not have the power to deal with all types of dispute about rents and leasehold matters.
  
  Retail Price Index
  
  Known as: RPI
  
  The Retail Price Index is a measure of inflation published monthly by the Office for National Statistics.
  
  It measures the change in the cost of a basket of retail goods and services.
  
  Retention
  
  An amount of money held back from the initial loan and not paid by the lender until specific repairs or improvements have been carried out by the purchaser.
  
  Return On Capital Employed
  
  Known as: ROCE
  
  Financial return from initial investment calculated as a gross or net figure. Annual Rent minus Interest divided by Deposit and Acquisition Costs
  
  Also see: Return On Investment, Yield
  
  Return On Investment
  
  Known as: Rate of Return, ROI
  
  How much you get out of an investment in comparison to how much you have put into it. Normally on a yearly basis and expressed as a percentage.
  
  Also see: Return On Capital Employed, Yield
  
  Reversion
  
  A special property purchase. An agreement with the vendor that they can still continue to live there for a specified time, normally until they die or some other significant agreed event happens.
  
  RICS Valuation
  
  The price a RICS surveyor values a property for on the open market.
  
  Usually calculated by comparative valuation with surrounding properties of a similar specification + visit to a property.
  
  Also see: MRICS, Royal Institution Of Chartered Surveyors
  
  Right Of Way
  
  A legal right to use any particular part of a property so as to gain access to their own property.
  
  Right To Buy
  
  When a tenant living in a council-owned (or other social housing owned) property, can purchase the property at a discount.
  
  Generally the size of the discount depends on the length of their tenancy. These days the discount is often capped.
  
  Also see: Rent To Buy
  
  Royal Institution Of Chartered Surveyors
  
  Known as: RICS
  
  A professional body of the property sector. 110,000 members globally and represents, regulates and promotes the work of property professionals throughout 120 countries.
  
  Also see: MRICS, RICS Valuation
  
  RTB
  
  "Right to Buy" or "Rent to Buy"
  
  Also see: Right To Buy, Rent To Buy
  
  Sale And Rent Back
  
  Known as: SARB
  
  When you buy a property and then rent it back to the people you have bought it off. You must now comply with FSA regulations for perform SARB.
  
  Schedule A
  
  Letting income is taxed under schedule A.
  
  Although expenses may be set against income there are special rules that apply which vary from those which apply to most other types of business income, which is taxed according to ?Schedule D'.
  
  The Inland Revenue has an explanatory leaflet, IR150, which can be downloaded.
  
  Sealed Bids
  
  If there are two or more interested parties in the purchase of a property then the offer will often be decided via Sealed Bids.
  
  This means that the purchase prices offers are made by each party in a sealed manner, i.e. provided via sealed envelope.
  
  When all bids are received the offers are unsealed and the best purchase price is selected.
  
  Also see: Tender
  
  Searches
  
  Refers to the determining of whether there are any unwanted/adverse effects in relation to a particular property.
  
  Should cover things that are already in place and things that are being planned.
  
  Also see: Local Search
  
  Seasoning
  
  Refers to the pay history on a loan. A loan that is ?seasoned? will have at least six months of pay history.
  
  Non-seasoned loans are more risky than seasoned loans because they lack a pay history.
  
  Section 21 Notice
  
  Notice to a tenant that he or she must vacate a property at the end of an assured shorthold tenancy agreement.
  
  Also see: Notice To Quit
  
  Section 8 Notice
  
  Notice to tenant to quit due to them being more than 8 weeks in arrears with the rent.
  
  Beware that if the tenant reduced the arrears of rent to less than 8 weeks, even if that is the day before an eviction Court hearing, the notice is no longer valid.
  
  Security Deposit
  
  Payment by a tenant held in escrow within a deposit protection scheme and kept (wholly or partially) on default or destruction of the premises by the tenant.
  
  Also see: Tenancy Deposit Protection
  
  Security Of Tenure
  
  This depends on the tenancy type:
  - Periodic: it will only come to an end either by an order of the court or surrender by the tenant.
  - Fixed Term tenancy: may be ended either by the passage of time, or by the landlord exercising the power to end the tenancy if clause in agreement grants the right.
  If a fixed term assured tenancy comes to an end in one of these ways, a new periodic assured tenancy will be created, known as a statutory periodic tenancy. Security of tenure remains.
  
  In order to regain possession, the landlord may only do so on one of a number of statutory grounds which are set out in Schedule 2 of the Housing Act 1988. To obtain an order for possession, the landlord must serve a section 8 notice on the tenant, setting out the ground or grounds that are relied on and then, after a period of time that varies depending on the grounds chosen, apply to the court for possession.
  
  Self Build
  
  When you build the property yourself, either yourself by hand or hiring builders, surveyors etc to be involved with the planning and building.
  
  Self Build Mortgage
  
  A mortgage taken on to build a property. It the loan amount is generally paid out in stages as the building is progressing.
  
  Self Certification Mortgage
  
  A mortgage where a buyer does not provide evidence of there income but instead they state their income and sign a confirmation of their ability to repay the mortgage.
  
  Normally the rates of a self certification mortgage will be higher than those of a standard mortgage.
  
  Service Charge
  
  Service Charges are paid by leaseholders and tenants living in blocks of flats. The charges may cover the cost of:
  - Upkeep and landscaping of shared grounds
  - Repair, maintenance & cleaning of exterior and internal communal areas. ( inc. shared lighting, heating or emergency alarm systems).