Estate agent jargon explained

• All Redrow customers have the option to use our panel of preferred new build mortgage specialists to advise on any and all queries.
• With you every step of the way, the team at your development’s Customer Experience Suite will be able to explain the process from offer to completion.

Agreement in Principle

An estimate of the amount a mortgage provider will lend you. The Agreement in Principle will be based on your credit history and other details. It’s sometimes also referred to as a mortgage in principle, a mortgage promise or a decision in principle. 

Annual Percentage Rate of Charge (APRC)

This is the annual cost of a mortgage over the duration of its lifetime. The APRC includes all the various fees your mortgage will be subject to (for example variable rates and fees), and can be used to compare mortgage rates.  

Appraisal

Appraisals are conducted by estate agents to determine the value of your property.

Arrangement Fee

The administration fee sometimes charged by lenders for setting up a mortgage.        

Base Rate

The interest rate set by the Bank of England. The Base Rate is often used by banks to set interest rates on financial products.

Building Survey

A type of survey producing a report into the physical condition of a property - sometimes also called a Full Structural Survey. 

Chain

In property, a chain happens when the sale of a property relies on the sale of another existing property.      

Completion Date

The date when the property transaction is complete and ownership is transferred to the buyer. Typically, this is the date keys are handed over. 

Contract

This is the formal agreement, usually created by a solicitor, laying out all the legal terms and conditions of the property sale. 

Conveyancer

A qualified professional who carries out the conveyancing process on your behalf (this can also be handled by a solicitor).  

Covenant

A covenant is an agreement on legal obligations for a property, which can affect the usage of the property or land. A positive covenant means a particular action is required by owners (i.e. maintenance), whereas a restrictive covenant prohibits the use of a property in a stated manner. 

Deeds

The deeds are legal documents showing who owns a property or piece of land, as well as any details about usage (e.g. what can be altered, rights of way). 

Default

If you default on your mortgage, it means you haven’t made the regular required payments. 

Deposit

An amount of money used to reserve or secure a particular property. This is usually 10% (or less) of the property price, with the rest to be paid later (usually with a mortgage). 

Early Repayment Charge (ERC)

This is a charge you may incur if you pay off the amount of your mortgage before the agreed period. 

Easement

This is the right of a landowner to use another piece of land nearby for their benefit (e.g. to arrange a private right of way). 

Energy Performance Certificate (EPC)

A standard certificate that rates the energy efficiency of a property on a scale from A to G (with A being the highest level of efficiency). 

Equity

The difference between the market value of your home and the amount left in the outstanding mortgage or loan.  

Exchange 

Once contracts are exchanged, the sale of a property is legally binding. This means that neither party (buyer or seller) can pull out without incurring a penalty.  

First-time Buyer

A buyer who doesn’t already or hasn’t already owned property. 

Fixed Rate

Fixed rate mortgage interest rates remain the same for a set period of time, as opposed to a variable rate.

Freehold

A freehold means you have ownership of both the building and the land it stands on. 

Gazumping

This is when a seller accepts an offer on a property and then rejects it for another, higher offer. 

Gazundering

This is when an offer from a buyer is lowered right before exchange of contracts. 

Guarantor

A guarantor is a third party (often a relative or friend), who guarantees to cover payments on your mortgage if you cannot. 

Home Buyers Report

This report provides an overall review of the structural condition of a property.

Instruction

An instruction tells your estate agent to market your property, or tells your solicitor to carry out conveyancing on your behalf. 

Interest Rates

The additional charges added onto the total amount you owe on a loan, generally calculated using the Base Rate. As an example, if your mortgage has a 5% interest rate, you will owe the entire amount of the loan plus an additional 5% of this amount.  

Land Registry

The official government records of all properties in England and Wales. 

Land Transaction Tax (LTT)

In Wales, Stamp Duty was replaced by LTT in 2018. If you purchase a home in Wales, you will be charged LTT if the value of the property is over £180,000. The amount of LTT will depend on the overall cost of the property.

Leasehold

Leaseholders own a property itself, but not the land it’s on. The lease will have a time period, after which it will need to be renewed with the landowner. While leaseholds are more common for flats, they are occasionally applicable to houses too. 

Loan-to-Value (LTV)

Essentially, LTV covers how much of your mortgage will pay for the overall price of the property you’re purchasing. As an example, if your mortgage has 70% LTV, it will cover 70% of the overall price of the property.

Mortgage

A loan designed to pay for a property, which is paid back over time (plus interest). The house or property is used as collateral against the mortgage loan, so if monthly repayments are defaulted on, the home may be repossessed.

Open Market Value (OMV)

A property’s fair value in the open market. 

PCM (Per Calendar Month)

A common abbreviation typically used to explain payment schedules. 

Right of Way

Legally, a right of way allows another to pass along a specific route on someone else's land.

Searches

During searches on a property, local council records are reviewed for any restrictions or planning applications.

Snagging

Generally applying to new build homes, snagging checks remedy any faults with a property - i.e. fixing appliance fitting or touching up paint.

Sold Subject to Contract (SSTC)

SSTC means an agreement has been made to purchase a property, but contracts haven’t been officially exchanged yet. One of the more commonly seen pieces of estate agent jargon! 

Stamp Duty

Buyers in England and Northern Ireland are subject to this lump-sum tax (officially called Stamp Duty Land Tax, or SDLT) on residential properties priced over £250,000. The amount you owe will depend on the purchase price of the home. 

Standard Variable Rate (SVR)

The rate your lender charges after your introductory mortgage deal expires (usually after two to five years). Your lender, rather than the Bank of England, sets this rate.

Survey

An inspection or assessment of a property, carried out by a professional surveyor.  

Surveyor

A qualified and certified professional licensed to carry out property surveys. 

Title

The legal right to own a property or a piece of land. 

Under Offer

This means the seller of a property has accepted an offer, but legal contracts haven’t been exchanged. 

Vendor

Another word commonly used instead of seller. 

Verbal Offer

An offer on a property that isn’t legally binding, before the official legal offer is finalised. 

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