Glossary
UK home-buying words explained simply.
- Agreement in Principle (AIP)
- A lender's preliminary indication of how much it may lend, based on the information available at that stage. Not a final mortgage offer. Also called Decision in Principle (DIP) or Mortgage in Principle (MIP).
- Chain
- A series of linked purchases where each buyer depends on another sale.
- Completion
- The day the money is transferred, the property becomes yours and you get the keys.
- Conveyancing
- The legal work of transferring ownership of a property, done by a solicitor or licensed conveyancer.
- Deposit
- The part of the purchase price you pay from your own money.
- EPC (Energy Performance Certificate)
- A certificate rating a home's energy efficiency from A (best) to G.
- Exchange of contracts
- The moment the purchase becomes legally binding and the completion date is fixed.
- Freehold
- Ownership of the building and the land it stands on, with no time limit.
- Gazumping
- When a seller accepts a higher offer from someone else after accepting yours, before exchange.
- Gifted deposit
- Money given (not lent) by a family member towards your deposit, usually confirmed in a signed gift letter.
- Ground rent
- A payment some leaseholders make to the freeholder. Rules have changed for many new leases — check the lease.
- HM Land Registry
- The government body that records who owns land and property in England and Wales.
- Leasehold
- Owning the right to occupy a property for a fixed number of years under a lease, usually common for flats.
- Loan-to-value (LTV)
- The mortgage as a percentage of the property price. A £180,000 mortgage on a £200,000 home is 90% LTV.
- Memorandum of sale
- The estate agent's document confirming the agreed sale and the parties' details.
- Mortgage adviser / broker
- An FCA-authorised professional who recommends a mortgage suitable for your circumstances.
- Mortgage offer
- The lender's formal offer to lend on a specific property, with conditions and an expiry date.
- Mortgage term
- The number of years over which the mortgage is repaid.
- Searches
- Checks your solicitor makes with the council, water company and others about the property and area.
- Service charge
- Money leaseholders pay towards maintaining shared parts of a building, such as the roof, stairs and gardens.
- Source of funds
- Evidence showing where your deposit came from, required under anti-money-laundering rules.
- Stamp Duty Land Tax (SDLT)
- Tax that may be payable on property purchases in England and Northern Ireland. Scotland has LBTT and Wales has LTT.
- Survey
- An independent inspection of a property's condition by a surveyor you choose.
- Title
- The legal record of who owns a property and any rights or restrictions affecting it.
- Valuation
- The lender's assessment of the property's value for lending purposes. It is not a survey.