When buying a property you may come across many new and unfamiliar terms, which may leave you confused or unsure. That's why we have compiled this jargon buster, to explain some of the common phrases you may encounter.

Annual Percentage Rate (APR)

The APR is a compound interest rate figure used to compare different mortgages. Defined by law, it includes repayments on the loan plus any mortgage related fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing over the entire term and should appear on all mortgage illustrations.


A person applying for a property to buy.

Appraised Value

The estimated value of a property, following a survey.


The increase in the value of a property from market condition changes.

Building Survey (formerly full structural survey)

A full inspection of the property, conducted by a chartered surveyor, who will write a detailed report setting out the soundness of a property and any property defects. Suitable for any house, particularly older properties and those that have been poorly maintained as well as properties that have been extensively altered or extended, or any property due to be altered or extended.

Buildings Insurance

A form of insurance which covers repairs or rebuilding should your property be damaged.

Buy-to-let mortgage

A mortgage for people buying a property with the intention of letting it out.

Capital Appreciation

The growth or gain in the value of a property over time.

Capital Gains Tax

A tax on profits above a fixed level made from the sale of financial assets such as a house, flat or shares.


Documents which prove that you own a property. When buying and selling a property the deeds are transferred from the old owner to the new one.


Also known as legal fees, these are the costs associated with buying a property, including stamp duty, land registry and search fees.

Discharge fee

A fee imposed by the lender to release full ownership of a property at the end of the lending period. This is similar to an early repayment charge.

Draft Transfer

A legal document issued by the vendor's solicitor to the purchaser's solicitor setting out the terms and conditions of sale.

Early Repayment Charge (ERC)

A form of penalty charge which is applied should the mortgage be repaid before the minimum term.

Energy Performance Certificate (EPC)

A European standard of energy efficiency, defined as a scale of A-G. A valid EPC is legally required in order to sell a property.

Exchange of contracts

The legally binding agreement between the seller and buyer to the sale and purchase of a property at the agreed price.

Financial Services Authority (FSA)

The independent body that regulates the financial services industry in the UK.

Fixed rate mortgage

A mortgage with a ‘locked’ interest rate for an agreed period of time.

Flying freehold

A flying freehold occurs when part of a property extends over or under a neighbouring property.


A freehold sale means that the buyer owns both the property and the land it is built upon. The owner is referred to as the ‘freeholder’.


Where a seller accepts a higher offer from a third party on a property that they have already agreed to sell to someone else. Estate agents are legally obliged to inform a seller of any offers made, up until the exchange of contracts. If a high offer is made, the seller may choose to accept this instead, resulting in gazumping.


Where a buyer reduces their offer prior to the exchange of contracts.

Ground Rent

A price set by the freeholder, which is then charged to the leaseholder.

Home Buyers Report

A report produced which assesses the structural conditional of a property being bought.


The general rise in prices over time.

Interest Charges

An amount of money paid back to the lender of a loan in addition to the sum of money borrowed. This is calculated as a percentage of the amount borrowed.

Joint Income

The combined income of two people.

Land Certificate

A document issued by the Land Registry to prove ownership of registered land.

Land Compensation

Concerns the assessment of compensation where land, or some other interest in land, is being acquired, either compulsorily, or by agreement, by an authority possessing compulsory purchase powers.

Land Registry

The official body responsible for recording the ownership of land.


This means you own a property for a set number of years. When the lease expires, the property returns to the freeholder.

Land Search

A formal application for an inspection of the Land Registry register. A certificate is issued showing the current situation of the land in question.

Legal Fees

Fees that will be charged by your solicitor or conveyancer in relation to the purchase or sale of your property. They will include professional fees as well as any search and mortgage fees.

Maintenance Charge/Service Charge

The cost of repairing and maintaining communal parts of a building charged to the tenant or leaseholder.


A self-contained apartment (usually on two floors) in a larger house with its own entrance from the outside.


A sum of money borrowed from a lender such as a bank to fund the purchase of a property.

Offer of a Loan

A formal document approving the mortgage you have requested and detailing the Terms and Conditions that will apply.

Peppercorn Ground Rent

A nominal periodic rent usually paid annually.


The process of either changing a mortgage between providers, or taking out a second mortgage.


The point where a mortgage has been fully repaid.


The process whereby the lender seizes ownership of the property when repayments cannot be met.


When a lender decides to hold back (retain) a portion of the mortgage until specific requirements are met.

Share of Freehold

Where the freehold on which the property stands is owned by a limited company and the shareholders of that limited company are the owners of the property.

Title Search

A check carried out by a solicitor or similar into the ownership history of a property. A search can highlight any potential issues which could affect the buying and selling of a property.

Under Offer

The time between a selling accepting an offer and the formal exchange of contracts taking place.

Valuation/Market Appraisal

A survey of a property to determine its value. This is required for many mortgage providers to agree to lending.


The person who is selling a property.