Plain-English explanations of the terms you will meet when buying, financing and letting property in the UK.
A lender's conditional indication that it would lend up to a certain amount before a full mortgage application is made; not a binding offer.
Read →Buy-to-let means purchasing a property specifically to rent it out; lenders assess affordability mainly on expected rental income rather than the borrower's salary alone.
Read →CGT is the tax charged on the profit made when selling a property; non-UK residents are within scope for UK residential and commercial property disposals.
Read →Commonhold is a form of ownership where each flat owner holds their unit outright and all owners collectively manage shared areas through a commonhold association; it remains rare in England and Wales.
Read →Completion is the day the buyer pays the remaining balance and legal ownership of the property transfers; for new-builds it also refers to the date the property is ready for handover.
Read →Conveyancing is the legal process of transferring property ownership from seller to buyer, carried out by a solicitor or licensed conveyancer.
Read →Council tax is an annual local-authority charge on occupied residential properties in England and Wales, banded by property value, with the occupier rather than the owner normally responsible for paying it.
Read →An EPC is an official certificate rating a property's energy efficiency from A (most efficient) to G (least efficient); minimum standards apply to rented homes in England and Wales.
Read →EWS1 (External Wall System form) is a fire-safety assessment document required by mortgage lenders before lending on flats in tall or clad buildings in England and Wales.
Read →Exchange of contracts is the moment a property purchase becomes legally binding; the deposit is paid and the completion date is fixed.
Read →Freehold means you own the property and the land it stands on outright, with no time limit and no superior landlord above you.
Read →Ground rent is the annual sum a leaseholder pays to the freeholder for use of the land; recent legislation has significantly restricted it for newly granted leases in England and Wales.
Read →A guarantor is a person who legally agrees to pay a tenant's rent or meet lease obligations if the tenant fails to do so.
Read →HM Land Registry is the government body that officially records property ownership, title and charges over land and property in England and Wales.
Read →An HMO is a property rented by several unrelated tenants who share facilities such as a kitchen or bathroom; a local authority licence is often required.
Read →ILR is the UK's settled status, granting the right to live and work here without time restriction; it is earned through a qualifying visa route, never through purchasing property.
Read →Leasehold means you own the right to occupy a property for a fixed number of years, while a separate freeholder owns the land beneath it; ground rent and service charges typically apply.
Read →LTV expresses a mortgage as a percentage of the property's value; a £150,000 loan on a £200,000 property gives an LTV of 75%.
Read →A mortgage available to buyers who live outside the UK, typically requiring a larger deposit and offered by a more limited pool of lenders.
Read →An off-plan property is one purchased before or during construction, typically with staged payments made as the build progresses rather than in a single sum at completion.
Read →Rental yield expresses annual rent as a percentage of the property price; gross yield is calculated before costs, net yield after all expenses are deducted.
Read →A reservation fee is a payment made to take a new-build property off the market while contracts are being prepared; refundability terms vary by developer and must be checked carefully.
Read →An extra percentage of Stamp Duty Land Tax charged on top of standard SDLT rates for buyers who are not UK-resident for tax purposes; always check GOV.UK or a qualified adviser for the current rate.
Read →A service charge is the annual contribution leaseholders pay toward the running, maintenance and management costs of a building's shared areas and services.
Read →Share of freehold means leaseholders collectively own the freehold title of their building, typically through a jointly held company, giving them greater control over the property.
Read →Sharia-compliant home finance avoids interest by using structures such as Ijara, Murabaha and Diminishing Musharaka, offering an alternative to a conventional mortgage in the UK.
Read →Snagging is the process of inspecting a new-build property for defects, unfinished work or poor workmanship before or shortly after legal completion.
Read →An SPV is a limited company set up solely to hold rental property; it carries different tax treatment and mortgage conditions compared with owning property in a personal name.
Read →SDLT is a government tax on property purchases in England and Northern Ireland, calculated in bands on the purchase price.
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