Terms used across these guides

Definitions as the words are used on this site. Where a term has a precise legal meaning that varies by jurisdiction, the entry describes the idea rather than the rule.

Agreement in principle

A lender's provisional indication of what it would be prepared to lend, based on stated information. Not an offer and not binding.

Amortisation

The gradual repayment of a loan's principal over its term through regular payments that also cover interest.

Asking price

The price at which a property is marketed. A position taken by the seller, not an assessment of value.

Building line

The distance the fronts of buildings sit back from the street, and how consistent that distance is along it.

Chain

A set of linked purchases that must complete together because each household is funding its purchase from its sale.

Completion

The point at which funds move, ownership transfers and possession changes hands.

Condition report

A survey concerned with the visible state of a building rather than with its value.

Conveyancing

The legal work of transferring ownership of property, including examining title, raising enquiries and ordering searches.

Covenant

An obligation attached to land, commonly a restriction on what the owner may do, which can bind later owners.

Deposit

The share of the purchase price funded from the buyer's own resources rather than borrowed.

Easement

A right over someone else's land, such as a right of way or a right to run services through it.

Equity

The difference between what a property is worth and what is owed against it.

Exchange

The moment at which the parties become legally committed to the transaction and a completion date is fixed.

Fixed rate

A mortgage rate held constant for a stated period, after which the loan normally reverts to a variable rate.

Freehold

Ownership of the land and the building on it, without a fixed term.

Grain

The pattern of plot widths and depths in an area, which shapes the buildings that can sit on it.

Ground rent

A periodic sum payable under some leases in respect of the land.

Infill

New building on leftover ground within an already-developed area.

Interest-only

A mortgage on which payments cover interest alone, leaving the principal to be repaid separately at the end of the term.

Leasehold

Ownership of a right to occupy for a fixed term on stated conditions, rather than ownership of the land itself.

Loan-to-value

The loan expressed as a percentage of the property's value. Lenders normally price in bands of it.

Local authority search

An enquiry to the relevant authority about what it holds concerning a property, including planning history and road status.

Principal

The sum borrowed, as distinct from the interest charged on it.

Registered title

The official record of ownership of a property and of the rights and burdens affecting it.

Repayment mortgage

A mortgage on which each payment covers interest and also reduces the principal, so the debt reaches zero at the end of the term.

Search

A specific enquiry made of a specific body about a specific property during the legal stage of a purchase.

Security of tenure

The extent to which an occupier is protected against being required to leave.

Service charge

A sum payable towards the cost of maintaining shared parts of a building or estate.

Stock and flow

The total number of dwellings in an area, against the small number available to buy at any moment. Only the second sets prices.

Stress test

An assessment of whether a borrower could still meet payments if rates were materially higher.

Term

The period over which a mortgage runs.

Turnover

The share of an area's housing stock that changes hands in a year.

Unrecoverable cost

Money spent on housing that does not come back, such as rent or the interest portion of a mortgage payment.

Valuation

An assessment of the price a property would be expected to achieve, prepared for a stated purpose such as lending.