When you start searching for a home, you’re likely to come across all sorts of unfamiliar terms. From mortgage lingo to legal phrases and everything in between, the language of buying, selling and renting can feel like a different world.
At drifthome, we believe finding your perfect place shouldn’t be confusing. That’s why we’ve created the ultimate jargon buster to help you decode common property terms, grouped in a logical, easy-to-follow format so you can quickly find what you’re looking for.
Mortgage & Finance Terms
Understanding the language of lending is crucial for any buyer. Here’s what you need to know:
- Agreement in Principle (AIP) – What does Agreement in Principle mean? It’s a conditional statement from a mortgage lender confirming how much they might lend you based on your income and credit score. It shows sellers you’re a serious buyer.
- Annual Percentage Rate of Charge (APRC) – What does APRC mean? It shows the total cost of a mortgage over its lifetime, including fees and interest. A useful comparison tool.
- Bank Rate – This is the interest rate set by the Bank of England. It influences mortgage rates across the country.
- Bridging Loan – A short-term loan to help you buy a new property before selling your existing one.
- Deposit – What is a deposit when buying a home? It’s the upfront payment (usually 5–10%) you put down to secure your purchase.
- Early Repayment Charge (ERC) – A fee charged by your lender if you pay off or switch your mortgage early.
- Equity – The portion of your home that you own outright. It’s your deposit plus any mortgage you’ve already repaid.
- Execution-Only – Choosing a mortgage without taking advice from a broker.
- Fixed Rate – A mortgage where your interest rate stays the same for a set time (e.g. 2–5 years).
- Interest Rate – The percentage you’re charged for borrowing money on your mortgage.
- Loan to Value (LTV) – What does LTV mean? It’s the ratio of your loan amount to your property’s value, expressed as a percentage.
- Mortgage – A long-term loan used to buy a home. The lender can repossess your property if repayments aren’t met.
- Mortgage Advance – The amount of money your lender agrees to give you.
- Repayment Mortgage – A mortgage where your monthly payments go towards both the loan and the interest.
- Standard Variable Rate (SVR) – The default interest rate you move onto after your fixed or discounted deal ends.
Buying & Selling Process Terms
These are the terms you’ll encounter from your first offer to collecting the keys:
- Chain – What is a property chain? It’s when multiple property transactions depend on each other to complete.
- Completion – The final stage of a sale when legal ownership transfers and you get the keys.
- Completion Statement – A breakdown of all costs related to your purchase, issued by your solicitor.
- Conveyancer – A legal professional who manages the transfer of property ownership.
- Conveyancing – The legal process of buying or selling a home.
- Deeds – Legal documents that prove who owns a property.
- Deposit (again) – Appears at multiple stages; it’s also paid at exchange of contracts to secure the purchase.
- Exchange of Contracts – The moment the sale becomes legally binding. Backing out after this usually means losing your deposit.
- Gazumping – When a seller accepts a higher offer after already agreeing to yours.
- Gazundering – When a buyer lowers their offer just before exchange, pressuring the seller to accept less.
- Snagging – A list of minor issues or defects found in a new-build property before move-in.
- Surveyor – A qualified expert who checks the property’s condition and value.
- Under Offer – What does under offer mean? It’s when a seller has accepted an offer, but the sale hasn’t been finalised yet.
- Vendor – Another name for the property seller.
Ownership & Tenure Terms
Not all property ownership is created equal. Here’s what the common terms mean:
- Commonhold – A type of ownership where each unit owner also owns a share in the management of common areas.
- Covenant – A legal agreement in the deeds that restricts or obliges certain uses of the property.
- Easement – A legal right to use someone else’s land for a specific purpose, like a path or driveway.
- Freehold – You own both the building and the land it stands on outright.
- Leasehold – You own the property for a set number of years but not the land. Often applies to flats.
- Length of Lease – The remaining time on a leasehold agreement. Low lease length can affect property value.
- Share of Freehold – When you own your flat and a share of the building’s freehold.
- Tenants in Common – Joint ownership where each person owns a separate share, which can be passed on in a will.
- Joint Tenants – Joint ownership where if one person dies, the property automatically goes to the other owner.
- Title – The legal right to ownership of the property.
Surveys & Condition Reports
Knowing the state of the property is essential before you buy:
- Building Survey – A full structural report, ideal for older or unusual properties.
- Energy Performance Certificate (EPC) – What does an EPC show? It rates a home’s energy efficiency from A (best) to G (worst).
- HomeBuyers Report – A mid-level condition survey suitable for standard properties.
- Snagging Survey – An inspection of a new-build home to identify minor issues or cosmetic defects.
- Valuation Survey – Commissioned by your lender to ensure the property is worth what you’re paying.
Tax, Insurance & Legal Fees
These extra costs can add up, so it’s good to understand them in advance:
- Disbursements – Expenses paid by your solicitor, such as search fees or Stamp Duty.
- Early Repayment Charge (ERC) – A penalty for paying off your mortgage early (see above).
- Land Registry – Government database that records property ownership.
- Stamp Duty Land Tax (SDLT) – What is Stamp Duty? It’s a tax you pay when buying a property over a certain value. Use a calculator to work out your amount.
- Service Charges – Fees for maintenance of shared areas in flats or estates.
- Ground Rent – A regular charge paid by leaseholders to the freeholder.
- Sinking Fund / Reserve Fund – A pooled fund for major works like roof replacements.
Types of Homes & Schemes
From property types to government help, here’s what the terms mean:
- Affordable Housing – Homes built with government support to be sold or rented below market rates.
- Buy-to-Let – A property purchased specifically to be rented out.
- First-Time Buyer – Someone purchasing their first-ever home.
- Help to Buy – A now-closed government scheme that supported first-time buyers with an equity loan.
- Lifetime ISA – A tax-free savings account for first-time buyers with a 25% government bonus.
- New Build – A newly constructed property that hasn’t been lived in.
- Registered Provider – A housing association or non-profit organisation that provides affordable housing.
- Shared Ownership – What is shared ownership? It allows you to buy part of a home and rent the rest, with the option to increase your share over time (staircasing).
Final Thoughts
Property jargon can be overwhelming, but understanding the terminology helps you stay in control of the buying or renting process. Whether you’re a first-time buyer or moving up the ladder, drifthome is here to make the journey simpler.
We’re building a smarter way to search, with tools that learn what you like, let you swipe through homes, and chat directly with agents. No more jargon. Just homes you’ll love.
