Some Property Terms Used In The UK – Explained!
1 April 2016
Understanding property management may seem like a hassle, and it is sometimes as hard to grasp as law. But to make life easier for those who wish to comprehend the world of property and housing, here are a few terms that will help.
Taken from the website www.rockestates.co.uk, which houses a plethora of property parlance to get to grips with from A-Z, we will just include terms that will be of common use in the field. In accordance with the website, we also start our list with the beginning of the alphabet.
Let’s start with Additional Security Fee. The site explains that this is a one-off fee charged by the lender. It is usually payable, up-front, on mortgages of more than 75% of the house value in order to protect the lender from repayment defaults. It is also known as MIG (Mortgage Indemnity Guarantee), Indemnity Premium or Indemnity Guarantee Premium. Next is Basic Variable Mortgage Rate. This is the standard rate of interest charged by a mortgage lender, who, taking into consideration any influential economic conditions, may, at times, increase or decrease this rate accordingly. Another term to understand is Bridging Finance, where a purchaser under certain circumstances may wish to complete the purchase of a property whilst still offering his own for sale. Lenders will advise as to whether the necessary temporary finance can be made available and the purchase can go ahead earlier. Some people use this means for a few days to enable them to move from property (a) to property (b) over a couple of days.
On to Conditions of Sale which means the detailed, standard terms which govern the rights and duties of the buyer and the seller of the property as specified in the contract that they sign. These may be national, statutory, or conditions of the Law Society. Then we have Covenant, where it is a legal agreement of the owner to do, or not to do, something in relation to the property. For example; restrictions on its use, changes to its appearance, etc. A financial term that is mentioned is Equity, which is the monetary value of a property or business beyond any amounts owed on it in mortgages or other claims. A Land Certificate is a certificate issued by the Land Registry as proof of ownership, and Redemption means the point in time at which a mortgage has been fully repaid.
A few more to include are Stamp Duty, which is the tax paid by the purchaser of a property to the Government in the UK. Currently based on the following rates: Up to £125,000 – nil £125,001 to £250,000 – 1% £250,001 to £500,000 – 3% More than £500,000 – 4%. Title Deeds are Legal documents describing the rights and liabilities that attach to the property and prove ownership of property. And as a final mention, Valuation is the value of a property, normally used for mortgage purposes, attained from a basic survey of the property. Mortgage lenders insist on a valuation before lending.
This article cannot include all the terms used in the property industry, as the website contains many more property-related phrases and meanings, but these few expressions mentioned show the abundance of knowledge about property, management and housing.