Buyers Jargon Buster

News at Stirling Ackroyd | 05/08/2019


A buyer’s guide to property

Buying a house? Congratulations! Whether you’re a first-time buyer or have purchased property before, you’ll probably come across a lot of unfamiliar words and phrases.

Check out our jargon buster for buyers to find out what they all mean.

Acceptance

The verbal agreement of accepting an offer on a property.

Agreement in Principle 

A document from a mortgage provider stating how much they are willing to lend you. Some estate agents require this before they can show you any properties.

Arrears

If you fail to keep up with your mortgage repayments and get into debt, you will be in arrears.

Asking Price

The price at which a property is offered for sale.

Buildings insurance

Any structural components such as the roof, walls or ceilings should be covered by buildings insurance. 

Bridging loan 

A short-term loan designed to help you to buy a new property before your old one has been sold.

Chain 

The number of people who need to exchange contracts at the same time in order to move house.

Completion

After exchanging of contracts, you will agree on a completion date with your conveyancer. At this point, the sale of your new property is finalised and you can move in.  

Conditions of Sale

The conditions in the contract which state the terms/ rights of the buyer and seller.

Conveyancer

A specialist lawyer trained to deal with the legal transfer of property from one person to another.

Deed

A document which outlines the legal ownership of a property.

Early Redemption Charge

If you pay off a loan early, you might be liable to pay an early redemption charge. Always check this with your mortgage provider before agreeing to a new contract.

Energy Performance Certificate (EPC)

A document that demonstrates the energy efficiency of a property rated from A-G (best to worst) and indicates running costs.

Exchange of contracts 

The point (in England) when the sale of a property becomes legally binding. Up until this time, a buyer or seller can withdraw

Freehold

If you own a property on a freehold basis, you legally own the property and the land on which it sits.

Gazumping

Before exchange of contracts, a buyer or seller can withdraw at any point. If a seller is presented with a better offer before this time, they can choose to accept it, which unfortunately means the previous buyer has been ‘gazumped’.

Guarantor 

A person who is responsible for paying a mortgage should the holder not be able to keep up with the payments.

Help to Buy 

A government-run equity loan scheme that lends buyers up to 20% of the cost of a newly built home (40% in London). This means that buyers only need to find a 5% cash deposit and a mortgage to cover the remaining amount. 

HM Land Registry

The body that registers the ownership of land and property in England and Wales.

Leasehold

If you buy a property on a leasehold basis, you lease it from the freeholder (or the landlord) for a period of time. Leases are long-term and usually run from 90 – 120 years.

Loan to Value (LTV) 

The amount a buyer can borrow from a mortgage lender based on the value of the property. For example, if a property is worth £100,000 and the mortgage lender’s maximum LTV was 70%, the maximum mortgage would be £70,000.

Mortgage

The loan secured against the property. Unless you can buy a property outright, you’ll probably need to borrow some money from a lender, or via a mortgage advisor.

Negative Equity

If the market value of a property drops below the outstanding mortgage secured on it, an owner will be in negative equity.  

Offer

If you want to secure a property, an estate agent will ask whether you’d like to make a formal offer. If the seller accepts this, the property will usually be taken off the market and listed as ‘sold – subject to contract’.

Redemption Figure

If you’re selling an existing home which has a mortgage, you’ll need to settle the outstanding balance (including charges and interest). This is known as a redemption figure.

Searches 

A conveyancer will make enquires to bodies such as the Land Registry and Local Authority to make sure property and its surrounding areas are sound.

Stamp Duty Land Tax (SDLT) 

A tax on properties and land purchased in England and Northern Ireland. The amount you pay will depend on the house price, visit the government’s website for more information.

Sold - subject to contract

See ‘offer’ above.

Surveying 

Before you formally purchase a property, a qualified expert will assess its condition and complete a report on your behalf.  

Under offer

This means another buyer is interested in a property and has made an offer to the seller, which is being considered.

Valuation 

An estate agent will usually value your property before it’s put on the market, also known as a ‘market appraisal’. However, if you need a mortgage, a surveyor might need to visit the property on behalf of your lender to make sure it’s worth the agreed price. This is also known as a valuation.

Vendor 

The person who currently owns a property, also known as a ‘seller’.

 

If you’re looking to buy or sell a home, talk to our property experts in branch today. Call 020 3697 7648 or email us today for more information.