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A Guide to Property Jargon

Published: 25/10/2021

When it comes to buying, selling, letting or renting a property, you will likely be faced with words, phrases, acronyms and expressions that you may be unfamiliar with.

To shed some light on these troublesome words, here at Wayne and Silver, we have compiled a quick A-Z list of property jargon and their definitions.

APR

The APR – or Annual Percentage Rate – refers to the interest rate of your loan, repayments and any other fees to indicate the overall cost of the loan. The lower the APR, the better the deal is, so it’s handy when comparing different loan offers.

Break clause

This is a ‘break’ in a clause that is agreed between the landlord and tenant for a fixed term tenancy. A break clause will usually allow either party to give written notice after a particular date of the tenancy earlier than the original fixed term.

Chain

A sequence of linked property purchases, each of which is dependent on the preceding and succeeding purchase. Generally, a chain is formed when a buyer is reliant on the sale of their own home to purchase a new property.

Conveyancing

Conveyancing is the legal process of transferring the ownership of a property. The conveyancer will advise buyers and sellers of their rights, research legal ownership of properties and liaise with mortgage lenders and estate agents.

EPC

Introduced in 2007, an Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and stipulates how much fuel bills might cost. Landlords are legally required to provide an EPC in their rental property (which is graded from A to G) and non-compliance results in a fine. Recent regulations require properties to have a minimum EPC rating of E.

Gazumping

An unpopular practice where a seller accepts a higher offer from a third party prior to a legal exchange of contract with the initial buyer. In contrast to this, gazundering is when a buyer decides to make the seller a lower offer just before contracts are due to be exchanged.

HMO

Known as Houses in Multiple Occupation, HMOs occupy at least three tenants form more than one household, sharing toilet, bathroom or kitchen facilities. A home that has five tenants sharing facilities and is at least three stories high is known as a large HMO.

Inventory

An inventory is the listing of contents included in rental properties that are let on an assured shorthold tenancy (AST) and can include anything from kitchen utensils to garden equipment. The condition of a property, structural fixtures and fittings are also part of the inventory process.

LTV

A loan-to-value is the ratio of the value of your mortgage to the value of your property, usually expressed as a percentage. To put into context, if a property is worth £400,000 and you take out a mortgage of £200,000, then the LTV is 50%. First-time buyers with lower deposits will likely be relying on a higher loan-to-value.

Negative equity

This is when the value of your home falls below the outstanding mortgage, meaning that it is now worth less than the mortgage you still owe on. For example, a sharp drop in house prices pushed many into negative equity following the 2008 global financial crisis.

Stamp duty

Officially known as Stamp Duty Land Tax (SDLT), stamp duty is a government tax applied on land property transactions over a certain price. The tax is charged at different rates depending on whether the property is residential, non-residential, freehold or leasehold. In November 2017, stamp duty was abolished for first-time buyers on homes worth up to £300,000.

Vendor

Another word that you are likely to see or hear regularly. Vendor is the official word for a seller of a property. So, vendors and buyers translate to sellers and buyers.

And there you have it. We hope that this list has enabled you to enter the property sector without a dictionary in hand.