Agreement in Principle An estimate of the amount you can borrow from a mortgage lender based on your income and credit history. It serves as evidence that you have financing ready when your property offer is accepted. It is also known as a decision in principle, mortgage in principle, approval in principle, or mortgage promise.

Annual Percentage Rate of Charge (APRC) The total interest rate you’ll pay over the life of a mortgage. APRC accounts for all the different rates your mortgage will experience, allowing easy comparison of mortgage deals—lower rates generally indicate a better deal.

Bank Rate Also known as the ‘base rate’, this is the interest rate set by the Bank of England, which influences other banks. It serves as a benchmark for the interest rates banks charge when lending money.

Bridging Loan A short-term loan that enables a buyer to purchase a property before selling their current one.

Building Survey A detailed report on the physical state of a property, sometimes referred to as a full structural survey.

Chain A sequence of interdependent property sales and purchases. Chains can be complex, but a skilled estate agent can help keep them moving smoothly.

Commonhold A system of property ownership in buildings or estates with multiple units (like a block of flats). Unlike leasehold, you own the freehold of your property, and all property owners collectively manage the upkeep of the building or estate.

Completion Date The day the property transaction is finalized, and ownership transfers from the seller to the buyer. Typically, the seller’s solicitor will instruct the estate agent to release the keys to the buyer at this time.

Conveyancer A lawyer specializing in the legal aspects of transferring homeownership. They handle every legal detail of the home purchasing process, especially when a mortgage is involved.

Covenant A provision or promise in a deed that may affect or limit the use of property or land. Positive covenants require some action (like maintaining a fence), while restrictive covenants restrict land use in specific ways and services.

Deeds Documents proving property or land ownership, along with any associated responsibilities. Deeds are usually held by the mortgage lender until the mortgage is fully paid, after which they can be held by you or your solicitor.

Deposit A sum of money used to secure a property purchase, typically around ten percent of the full price. It shows your commitment to buying the property, with the remaining amount to be paid later or covered by a mortgage.

Early Repayment Charge (ERC) A fee charged if you overpay on a mortgage or switch to a different mortgage product within a specified period. Most mortgages allow some overpayment annually without incurring an ERC.

Easement The right of one landowner to use another’s land for a specific purpose, such as a private right of way.

Energy Performance Certificate (EPC) A certificate showing a property’s energy efficiency and environmental impact, graded from A (best) to G (worst).

Equity The amount of money a homeowner has invested in their property, built up over time through mortgage payments and property value appreciation.

Exchange of Contracts The point at which both parties are legally committed to the property transaction. Either party can back out before contracts are exchanged.

Execution-Only When a buyer selects a mortgage without seeking advice from a mortgage broker or advisor.

First-Time Buyer An individual who has never purchased or owned a property before. Renting does not count as ownership.

Fixed-Rate A mortgage term with an interest rate that remains constant for a set period.

Freehold A type of property ownership where you own both the building and the land it stands on.

Gazumping When a seller accepts a higher offer from another party, even after agreeing to an initial offer.

Gazundering When a buyer lowers their offer at the last minute, forcing the seller to accept the lower price or find a new buyer.

Interest Rates The percentage charged on a loan. For example, a four per cent interest rate on a mortgage means you pay back the loan amount plus four per cent of its value.

Land and Building Transaction Tax (LBTT) (Scotland) The tax paid when purchasing land or property in Scotland. The current threshold is £145,000 for residential properties and £150,000 for non-residential properties, with rates varying based on the purchase price.

Land Registry A government database recording property and land ownership in England and Wales.

Land Transaction Tax (LTT) (Wales) LTT replaced Stamp Duty in Wales in April 2018. It applies to residential purchases over £180,000 and non-residential purchases over £150,000, with rates based on the purchase price.

Leasehold A property ownership system where you own the property but not the land it sits on. Common with flats, leasehold properties have a lease period that must be renewed with the landowner.

Loan-to-Value (LTV) The ratio of your loan amount to the property’s price, expressed as a percentage. For example, a mortgage covering 60 per cent of a property’s price has an LTV of 60 per cent.

Mortgage A loan specifically for purchasing property, which you repay over time with interest. The property serves as collateral, meaning it can be repossessed if repayments are not made.

New Build A recently constructed property that hasn’t been lived in. Definitions can vary among banks and mortgage lenders. Some examples of good new builds can be viewed on the Design Inspiration profile.

Right of Way A legal right allowing someone to pass along a specific route on another person’s land.

Snagging The process where developers fix minor issues and touch up newly built properties before the buyer moves in. A snagging survey identifies cosmetic issues and workmanship quality.

Solicitor A legal professional handling various legal matters, including property transactions. They oversee the transfer of homeownership and provide broader legal advice.

Stamp Duty A tax on property or land purchases over a certain price in England and Northern Ireland. The current threshold is £125,000 for residential properties and £150,000 for non-residential properties, with rates varying based on the purchase price.

Standard Security (Scotland) A form confirming to your mortgage lender that they can repossess your home if mortgage payments are not maintained.

Standard Variable Rate (SVR) The interest rate your lender charges after your introductory mortgage deal ends, usually after two to five years. This rate is set by the lender.

Surveyor A property expert who assesses potential issues or benefits of a property, which may affect its price or require future repairs.

Title The legal right to own property or land.

Under Offer When a seller has accepted an offer from a buyer, but contracts have not yet been exchanged.

Vendor Another term for the seller.

Why not read more about the approved Property Association Members who are experts in all of the above fields.