Buying and Selling
Agreement in Principle
An estimate of how much money you can borrow from a mortgage lender. What you can borrow is based on your income and credit history; it can be used as evidence that you have the funds in place for when you have an offer for a property accepted. Also known as a decision in principle, mortgage in principle, approval in principle or mortgage promise.
A report into the physical state of a property sometimes referred to as a full structural survey.
Formed when several property sales and purchases are inter-dependent. A chain can become complicated but a good estate agent will be able to help keep it moving.
A lawyer who specialises in the transferring of homeownership. They are required if you are using a mortgage and will cover every legal aspect of the home purchasing process.
An amount of money used to secure a property purchase, usually ten per cent (or lower) of the full price. Paying a deposit displays your initial commitment to purchase with the remaining amount to be paid later or provided in the form of a mortgage.
Energy Perforamnce Certificate (EPC)
Shows the efficiency of a property and gives an indication of how much the energy bills will be. It is displayed as two graphs: the energy efficiency and the environmental impact of the property. Both are graded from A (the best) to G (the worst).
A system of ownership which means you own the building and the land it sits on.
A system of ownership where you own the property but not the land it sits on. For example, you may own a flat but not the building it sits within. There will be a time period placed on your lease which will need to be renewed with the landowner, always check how many years remain on the lease. Whilst common with flats, some houses are sold as leasehold too which has been subject to much scrutiny.
Right of Way
Right of way is a legal right for another to pass along a specific route on a piece of land or property belonging to another.
Where the developer of new build properties touches up paintwork, adjusts appliances and fixes any other faults within the property. A snagging survey is usually completed prior to the buyer moving in to spot minor cosmetic issues and check the quality of workmanship.
A lump-sum tax that anyone buying a property or land over a certain price in England and Northern Ireland must pay. The current threshold for residential properties is £125,000 and £150,000 for non-residential land and properties. However, the rate you pay will vary depending on the overall purchase price.
Another term for the seller.
Rentals and Landlords
A property owner whose initial intention was not to rent out the property. This can occur when someone struggles to sell their property or have inherited one.
Capital Gains Tax
Tax landlords pay when selling a property that is not their main home, applicable to any profit made on the increase in the property’s price.
Client Money Protection (CMP)
Reimbursement schemes which all letting agents in England, Wales and Scotland must belong to. They protect the agent's client money whilst it is being held by the agent. This is so that in the unlikely event that the agent goes bust or misappropriates the funds, landlords and tenants can apply for their money back through the CMP scheme. All Propertymark Protected members are covered by CMP.
When a tenant must leave a property permanently, usually for breaking a term of their tenancy agreement. Evictions commonly occur when tenants do not pay rent or if the landlord needs to regain use of the property.
A form of tenant with certain rights, who lives and shares accommodation with their landlord or a family member of the landlord.
Fair Wear and Tear
The natural deterioration that is reasonably expected to occur to a property's furniture, fixtures and fittings over time. It takes into account the length of tenancy and number of tenants living in the property. It is not something the tenant is liable for when deductions to a tenant's deposit are considered at the end of the tenancy.
House in Multiple Occupation (HMO)
A single property with at least three people who are not from the same family ('household') and share certain facilities such as a kitchen.
A notice served by a local authority for a landlord to resolve any hazards in the property.
A bacteria commonly found in water that causes serious illness. Landlords have a legal duty to assess and reduce the risk of legionella in their properties through risk assessments and taking necessary measures.
Minimum Energy Efficiency Standards (MEES)
The standard of energy efficiency a property must meet in order to be let, the minimum standard is defined by the energy rating on the property's Energy Performance Certificate (EPC).
Deposit information which a landlord must serve to their tenant within 30 days (in England and Wales) of having received their deposit. In Scotland, this must be given to the tenant within 30 working days of the tenancy start date. The information includes which scheme protects the deposit, their contact details, reasons the deposit may be held and how to resolve deposit disputes.
The payments which a landlord or letting agent can legally charge to a tenant, as defined under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include rent, tenancy deposit, holding deposit and utilities but do differ slightly between England and Wales.
Illegal charges under the Tenant Fees Act 2019 and the Renting Homes (Fees etc.) (Wales) Act 2019. They include cleaning, admin, gardening and referencing fees.
Right to Rent
A landlord's legal obligation to check the immigration status of any tenants who wish to rent their property. Only tenants that are legally allowed to live in the UK, either permanently or temporarily, are allowed to rent a property.
Section 8 Notice
The process used to evict a tenant where a ground for eviction can be proven, e.g. not paying rent, excessive damage the property or illegal activity.
A clause of the Finance Act 2015 that states that landlords will be taxed on all rental income, not just profit, and be given the basic tax rate relief (20 per cent) on their mortgage interest from April 2020.
When a tenant lets part or all of the property they are renting to someone else (a subtenant). Tenants must get permission from their landlord before subletting a property, otherwise legal action can be taken against them.
A tenant who is leasing from a mesne tenant, who is subletting a property.
Tenancy Deposit Protection
The legal requirement for all landlords to register a tenant’s deposit with a Government-approved tenancy deposit scheme. Failure to do so can result in difficulties over eviction or having to pay back three times the deposit amount to the tenant.