There's a lot of jargon associated with buying your home and some of it can be difficult to understand, particularly for first-time buyers. Hopefully this list will explain some of the terms you may experience during your property purchase. These explanation are in brief and you should always seek guidance from your Solicitor or Conveyancer.
Adoptable and Unadoptable Areas
Adopted areas are managed and maintained at public expense, usually by the Highway Authority/Local Council even though they do not own the land. Unadopted areas refers to private land owned, managed and maintained by someone other than the Local Council.
Housing built with subsidy from the Government, a housing association or other means, either for rent, outright sale or shared ownership. The subsidy enables the cost of rent/purchase to be affordable for households who could not otherwise afford the market rent/sale price.
A Building Control Body will issue a "Completion Certificate" or "Final Certificate" upon the practical completion of each new build property, to state that the work meets the technical requirements of the Building Regulations.
Protection for your property against hazards such as fire, flood and subsidence.
A technical report that will give you a comprehensive account of the condition of the property, it will detail any structural or other defects.
The person who is buying the property also known as the Purchaser.
Having reserved a property, if you decide not to continue with your purchase, you may cancel your reservation but you will lose some/all of your Reservation Deposit to offset legal and administrative costs incurred by the seller.
These are the property buyers and sellers that link together to make the chain for your particular sale or purchase. The chain may consist of only two people, i.e., you as buyer and the person you are buying from as a seller or it may consist of several buyers and sellers.
The CML (Council of Mortgage Lenders) is the main trade body representing U.K. mortgage lenders. Lenders will not release the mortgage funds until the purchasers solicitor has received confirmation from the builder that the property has passed a pre-handover inspection by NHBC or other warranty provider.
This is the date when the purchase becomes final and the Purchase Price is paid by the buyer's conveyancer and received by the seller's conveyancer. The keys are released to the buyer who may then move into the property.
Contents Insurance is insurance that pays for damage to, or loss of, an individual's personal possessions whilst they are located within your home.
The legal document that confirms the sale/purchase of the property. This is prepared in a draft form by the seller's conveyancer and sent to the buyer's conveyancer. Once all queries are answered it is then approved and the seller and the buyer each sign their own copy.
Conveyance Plan and Extract
Conveyance Plans are used to determine legal title of individual plots on completion of a development and give buyers a clear understanding of what they have bought. An Extract will identify by colour markings or other reference the transferred parcel.
Conveyance Plan Key
On the conveyance plan, there will be a key displaying use, ownership or shared rights and responsibilities. This can be explained to you by your solicitor/conveyancer or by the developers sales staff
These are obligations/restrictions that are attached to the property. There may, for example, be an obligation to maintain a fence or boundary or there may be a restriction on the type of building on the land.
These are the legal documents that contain information about the property.
Defects are aspects of build construction and works that are not in accordance with the contract. They may be material, component or finish which do not meet expected performance criteria. The contractor must rectify defects within the defined defects or rectification period.
Your down payment on a property, usually calculated as a percentage of the value of the property being purchased and payable on Exchange of Contracts
Items that the conveyancer must pay to other persons on your behalf, typically these are VAT, Stamp Duty, Land Registry Fees.
This is a search carried out by the conveyancer for the purchaser to check whether the property is connected to mains water and drainage and whether there are any other issues relating to drainage or water affecting the property.
It is the solicitor or conveyancer's job to make all the necessary enquiries to ensure that there is no reason why you might want to change your mind about buying the property. For example, it is vital to guarantee that the seller really owns and has the right to sell. Your conveyancer applies to local council for local searches, checks the title at Land Registry and reviews the contract and papers, and raises queries with the seller's solicitor.
This is a search that the conveyancer carries out to check whether there are any environmental issues affecting a property.
When purchasing a property with an Equity Loan, you will own 100% of your home but only have to cover a percentage of the cost initially with your mortgage and deposit. There is nothing to pay on the equity loan for a few years. The scheme you choose will determine whether you pay any interest and when you have to pay the loan back.
Estimated Build Completion
Build completion dates cannot be fixed as the build is dependent upon weather and many other factors, therefore an "estimated" completion date will be given.
Most buyers pay a deposit of around 10% of the agreed purchase price when contracts are exchanged. When contracts have been signed and exchanged, the buyer's solicitor gives the deposit to the seller's solicitor.
Exchange of Contracts
During the last stages of the legal process, you will Exchange Contracts, this means that you (the buyer) and the seller are both legally committed to the sale.
Extra Care is now widely used to describe retirement housing for rent, ownership or part ownership, where care is available. As residents' needs change, the level of care they receive can also change without the resident having to move.
This is a Completion Statement that your conveyancer will prepare detailing monies paid already, outstanding charges and costs in order to agree a balance to be paid over to complete your purchase.
Financial Conduct Authority (FCA)
The U.K. financial regulator for financial services.
A freeholder owns the land that the property is built on.
This is the rent paid to the Landlord usually on a Leasehold property where there is a long lease. Ground Rents are payable on some freeholds.
A person that signs a guarantee with a lender and promises to repay a borrower's loan if the borrower can't or won't.
Help to Buy
Help to Buy is the overall umbrella term for subsidised home ownership schemes. It includes equity loan and shared ownership schemes.
A more detailed survey than a mortgage valuation but not as detailed as a Full Structural Survey, this report is carried out by a qualified surveyor.
Homebuyer's Valuation Report
An assessment of the value and general condition of a property for mortgage purposes which is carried out by the lender's appointed surveyor.
Homes and Communities Agency
The housing and regeneration agency for England. It provides funding for affordable housing and improves quality of life by raising standards for the physical and social environment.
An IFA is an Independent Financial Advisor who is a qualified professional able to help you to arrange the finance for your purchase which may include a mortgage.
A discount or bonus offered to a buyer in order to secure their commitment to purchase or speed up a transaction.
The Land Registry is a government department that holds the records of all property in the U.K. The Land Registry is a government department that holds the records of all property in the U.K.
A lease is a document which details the matters affecting a leasehold property. It will include reference to the length of the lease, rent, service charges, rights of way, water, drainage and access and it will usually incorporate a plan.
A leaseholder buys the right to live in a property for an agreed period of time but does not own the land the property is built on, a ground rent may be payable.
When all funds for your purchase have been transferred between Solicitors the transaction will be ‘complete’ and you will be able to collect your keys to your new home
Legal Completion on Notice
Completion Notice will be served by the Developers' Solicitor on the Buyer (through their Solicitor) when the property is ready and has passed its final Building Regulation inspection.
An insurance policy that pays out on death or on certain other conditions.
Local Authority Search
This is a search carried out by the purchaser's solicitor to find out if there are any Local Authority Notices with respect to the property being purchased.
Some Help to Buy schemes require potential purchasers to have a family tie or employment link to the local area.
Long Stop Date
When purchasing a property before building works are complete or even started, you may be given an anticipated completion date. If, due to any construction issues arising, the anticipated build finish date may move. In some instances for you as a purchaser or any purchasers in a chain below you, there may be a desire to exchange contracts but have a very latest date added into the contracts, this is termed a long stop date, normally these dates are bettered.
If the property is Leashold or Freehold with communal areas (gardens, pathways, car parks), there will often be a management company set up to deal with the day to day running of the property and repairs and renewals. The management company collect a service charge from the property owners to pay for their services and for the upkeep and maintenance of the building or communal areas.
A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer. The loan is ‘secured’ against your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it, to recover any loan they have made.
A written offer to lend money on a property. The mortgage offer will contain all the terms of the Loan and the conditions upon which the money is loaned.
Mortgage Valuation Fee
The borrower generally pays a fee to the lender to have the property valued for mortgage purposes. This enables the Lender to take a commercial view on whether the property is worth what the borrower says it is and whether it is suitable security for the Mortgage. The Mortgage Valuer will not necessarily inspect the physical condition of the property.
Where a property is being purchased for the first time from the Builder or Developer.
Where a property is being bought at the planning stage and is yet to be built.
Options & Upgrades
Options are choices requested by the purchaser (this could be tile or worktop selection). Some options are standard and do not have a cost, other options or upgrades on basic specification will have to be paid for.
Some mortgages will require you to pay a redemption penalty (costs) if you pay off some or all of your mortgage or if you transfer to a different mortgage product within a certain timescale.
This is the term used for a Registered Social landlord which includes Local Authorities and Housing Associations.
This is a fee you pay to reserve your home. You will get this back when the sale completes as it will be deducted from the monies due on completion
There are many different types of Conveyancing Search. Which searches are needed for your property will be assessed by your conveyancers. Searches may include: Drainage/Water; Coal Mining; Environmental; Land Registry and Local Authority.
Section 106 Agreement
A section 106 Agreement is an agreement drawn up by the local planning authority setting out conditions on new developments which must be met by the developer e.g. provision of affordable housing, restrictions on allocations, requirements for children's play areas.
This is the person selling the property, sometimes also known as the Vendor.
Enables you to buy a proportion of a property, usually through a Registered Provider and pay a subsidised rent on the portion you do not own. Typically you initially buy between 25% and 75% of the property
Solicitor or Conveyancer
A licensed professional appointed to act on your behalf. They deal with all the legal contracts, undertake the searches will also act for the lender in connection with any mortgage being taken on the property.
These vary depending on the Solicitor or conveyancer you choose to use and will include charges such as Land Registry Fees, Search Fees and other expenses (disbursements).
Is the term used when you buy more shares in your Shared Ownership home or pay back part of your equity loan.
Stamp Duty Land Tax
This is a Government Tax payable on buying a property. Your Solicitor or Conveyancer will be able to advise you if the tax applies to your purchase and if so, how much it will be.
A detailed survey of the structure of a building carried out by a structural engineer or chartered building surveyor.
Subject To Contract
Before Exchange of Contracts, all negotiations relating to the property are "subject to contract",this means they are not binding unless contracts are exchanged.
A physical inspection of the property by the surveyor to check the condition of the property and to advise the buyer upon the value of the property. There are different types of survey and your conveyancer will advise you on the best type of survey for you. Do not confuse a survey with a Mortgage Valuation.
The person who is responsible for surveying the property. They will usually be a member of the Royal Institute of Chartered Surveyors RICS.
A "T" Mark may be applied to a Conveyance/Transfer Deed to identify boundary responsibilities. The "T" mark will point in the direction of the owner whose responsibility it is to maintain the wall, fence or hedge showing the "T" mark.
This is the legal document that transfers the ownership of the property.
New build properties will normally be sold with the benefit of a 10 year National House Building Council (NHBC) Guarantee or Premier Warranty, which is effectively an insurance policy which obligates the developer to fix all defects within the first two years. After expiry of the two year "defects period" up until the tenth year when the Guarantee or Warranty expires, the Guarantee or Warranty provides cover for repairs for major structural issues.