Land Acquisition and Property Development Company | Creative PropertyLand Acquisition and Property Development Company | Creative PropertyLand Acquisition and Property Development Company | Creative PropertyLand Acquisition and Property Development Company | Creative Property
  • Home
  • About Us
    • About CPG
    • Our Guarantees
    • Covid-19 Policy
  • Our Services
    • Landowners
    • Property Developers
    • Property Consultancy
  • Acquisitions
  • Investors
    • Investing with CPG
    • Case Studies
  • CPG Blog
  • Contact Us

Your Guide To Property Investment Jargon Part One

    Home Property Investment Your Guide To Property Investment Jargon Part One
    NextPrevious

    Your Guide To Property Investment Jargon Part One

    By Harvey Raybould | Property Investment | 0 comment | 29 June, 2016 | 0

    property investment jargon busterLike many industries, the world of property investment is littered with jargon. If you are new to the business it can be quite overwhelming at first. Even seasoned property investors are often caught out with a bit of jargon that they have never encountered before.

    We have searched around for you and found a really comprehensive jargon buster that explains numerous terms in a clear and concise way that is easy to understand even if you are just starting out. The jargon list has been compiled by OnTheMarket.com. It can be found below.

    Property Investment Jargon Buster A-E

    Absent landlord

    A landlord described as “absent” is one who cannot be contacted. If the lessees wish to create a Right To Manage Company but are unable to contact the landlord, they are free to make a legal application to acquire the right to manage.

    Acceptance

    The document you need to sign when accepting a lender’s mortgage offer.

    Administration fee

    A payment which is charged to cover the costs of processing a property rental application. This is paid by the tenant and will be taken from the initial monies once the tenancy starts.

    Annual Percentage Rate (APR)

    The total cost of a loan, taking into account interest charges, arrangement fees and other costs, shown as a percentage.

    Agreement fee

    A payment which is charged to cover the costs of drawing up a tenancy agreement. This is usually shared between the landlord and tenant.

    ARLA

    The Association of Residential Letting Agents, the UK’s foremost professional body for letting agents.

    Arrangement fees

    These are fees charged by a mortgage lender or broker to arrange a loan.

    Assign

    To transfer the right or interest in a property from one person to another.

    Assured shorthold tenancy (AST)

    A widely used rental agreement where the tenant is an individual and net rent does not exceed £25,000 a year. It covers a fixed period, so both parties know the date the property will be vacated.

    Base rate

    The rate of interest which the Bank of England charges for lending to other banks. These banks then use it as a benchmark for the interest rates they charge when lending money to consumers, often stipulating an interest rate “X% above the base rate”.

    Break clause

    A clause sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.

    Bridging loan

    A temporary short-term loan enabling someone to purchase a property before selling his or her existing property.

    Building inspection/Structural survey

    A report on the physical condition of a property. The surveyor will look at all accessible parts of the property and give a written report on defects or issues affecting it. See also Home Buyer Report. Not to be confused with a mortgage valuation.

    Capital

    Capital, also known as equity, is an asset that is less liquid than cash. It represents the amount of money you have put into a property, investment or deposit.

    Chain

    A chain is formed when several property sales and purchases are inter-dependent. A chain can be complicated but a good estate agent will be able to help keep it moving.

    Closing date (Scotland only)

    A time and date by which your solicitor must submit the buyer’s best offer in writing to the seller’s solicitor.

    Completion

    The point at which the sale of the property is concluded and the buyer receives the keys.

    Completion statement

    A document which your solicitor or conveyancer will provide as a record of all the financial transactions and costs.

    Conditions of sale

    The specific items in a sale contract that govern the rights of the buyer and the duties of the seller.

    Contract

    The legal document detailing the agreement of terms between the seller and buyer. When a sale is agreed, a draft contract is sent to the buyer by the seller’s legal representative and at exchange of contracts both parties are bound to a date on which to complete the sale.

    Contract race

    Where two or more purchasers are given a draft contract and the first one to exchange contracts buys the property.

    Conveyancer

    A representative, solicitor or licensed conveyancer, who deals with the legal aspects of buying or selling a property. The buyer and seller will each appoint their own conveyancer.

    Conveyancing

    The legal process of transferring the ownership of a property.

    Covenants

    Rules governing the property in its title deeds or lease.

    Credit search references

    References requested for a tenant applying to take up rented accommodation. Many agents and individual landlords use external companies who will contact the applicant’s employer, landlord and check the tenant’s credit history, providing a report on their financial suitability to rent.

    Date of entry (Scotland only)

    The date on which you become the owner of the property and can move in, having paid all money due.

    Deeds

    The legal documents that prove the ownership of the property.

    Deposit

    When buying: The amount of money paid by the buyer on exchange of contracts, usually 10% of the purchase price.

    When renting: A monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms. This is usually the equivalent to six weeks’ rent but may vary. If the deposit is for an Assured Shorthold Tenancy (AST), then it must be protected by one of the approved tenancy deposit protection schemes.

    The Deposit Protection Service

    The DPS is the only custodial scheme authorised by the Government; it is free to use and open to all landlords and letting agents. It requires a tenant’s deposit to be paid over to the DPS for the duration of the tenancy. This amount is then paid back at the end of the tenancy when an agreement between both parties has been reached.

    Dilapidations

    Items that have been damaged during a tenancy. The tenant is usually responsible for the cost of repair or replacement.

    Disbursements

    The items in addition to legal fees in conveyancing. These may include Stamp Duty Land Tax, Land Registry fees, search fees, mortgage redemption costs and any other expenses. All conveyancers should be able to estimate the likely level of disbursements before the transaction commences.

    Disposition (Scotland only)

    The new title deed, which is required in order to transfer the title of the property into your name.

    Draft contract

    The initial version of the contract. This may be amended during the course of the sale but becomes final at the point of exchange of contracts.

    Easement

    A right that affects a property – such as the right of neighbours to pass over an access path or the right of the water company to have their pipes and drains running under the property.

    Enquiries

    Questions which are raised by the buyer’s conveyancer, often about survey or property information forms.

    EPC

    The Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. It is displayed as two graphs – the energy efficiency and environmental impact of the property. Each is graded from A (the best) to G (the worst).

    Equity

    Your equity in your property is how much of it you own. It is the difference between the value of your home and the mortgage you still owe. Negative equity occurs when you owe more to your lender than the sale price of the property.

    Exchange of contracts

    The buyer and seller both sign the contract for sale and at a certain time and date the conveyancers action the exchange. At this point, the sale is binding and no terms may be altered.

    Part two of the Jargon buster will be posted next week.

    No tags.

    Leave a Comment

    Cancel reply

    You must be logged in to post a comment.

    NextPrevious

    OUR MEMBERSHIPS…

    Registered in England and Wales No: 09252187

    OUR LATEST NEWS…

    • property investment predictions 2021

      Property Investment Predictions For 2021

      Due to the uncertainty of 2020, property investors are likely to treat

      31 December, 2020
    • Covid-19 UK housing market 2020

      Covid-19 & The UK Housing Market 2020

      When you think about it, it is incredible how resilient the UK

      24 December, 2020

    OUR CONTACT DETAILS…

    Creative Property Group
    Letraset Building, Wotton Road, Ashford, Kent, TN23 6LN

    Phone Number
    0800 488 0027

    Email Address
    [email protected]

    Click here for our Covid-19 Policy

    © 2019 Creative Development Services Limited | Property Investment and Development Strategists | Privacy Policy | Terms and Conditions
    • Home
    • About Us
      • About CPG
      • Our Guarantees
      • Covid-19 Policy
    • Our Services
      • Landowners
      • Property Developers
      • Property Consultancy
    • Acquisitions
    • Investors
      • Investing with CPG
      • Case Studies
    • CPG Blog
    • Contact Us
    Land Acquisition and Property Development Company | Creative Property

    COVID-19 Update and Cookies

    The team at Creative Property continue to work from home where possible and ensure we comply with current government and public health guidance to help keep everyone safe and well when out on site. Cookies help us to improve the service we offer you. For more info on our cookie policy please click here.