Understanding UK Property Jargon
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Buying a home is one of most people’s biggest financial decisions. As such, navigating the world of property can be overwhelming, particularly when understanding the jargon used in the industry.
Whether you’re a first-time buyer or moving up the property ladder, we’ve compiled this guide to help you understand the most common property jargon in the UK. From ^ and leasehold to stamp duty and conveyancing, we’ll explain the key terms you need to know when buying a home.
We’ll also provide examples of how these terms are used in real-life situations, so you can feel more confident speaking to estate agents, solicitors, and other property professionals.
Conveyancing is the legal process of transferring property ownership from one person to another. This process typically involves the exchange of contracts and completion of the sale, including various tasks such as conducting property searches, reviewing legal documents, and arranging the transfer of funds.
Example: When a buyer makes an offer on a property, and the seller accepts it, the conveyancing process begins. The buyer’s solicitor or conveyancer will then carry out various searches and checks, including local authority searches, environmental searches, and checking title deeds.
A covenant is a legal agreement between the owner of a property and a third party that imposes certain restrictions or obligations on the property.
Example: A covenant may restrict the use of the property, such as preventing the owner from building an extension, or may require the owner to maintain the property in a certain way.
Stamp Duty is a tax paid by the buyer of a property to the UK government when purchasing a property above a certain price threshold. This tax is based on a percentage of the property’s purchase price.
Example: If a buyer is purchasing a property in the UK with a purchase price of £500,000, they would be required to pay £15,000 in Stamp Duty.
Leasehold is a type of property ownership where the buyer owns the property but not the land on which it is built and must pay ground rent and other charges to the landowner.
Example: If a buyer is purchasing a flat in a leasehold block of apartments, they would own the flat but not the land on which it is built. The buyer must pay the landlord or management company ground rent and potentially other charges.
Freehold is a type of property ownership where the buyer owns the property and the land on which it is built.
Example: If a buyer is purchasing a house, they would typically own the freehold of the property and the land on which it is built.
A chain is a sequence of linked property sales where one sale depends on another’s completion.
Example: If a buyer is purchasing a property and the seller is also purchasing another, completing both sales would depend on one another, creating a sales chain.
Gazumping is when a seller accepts a higher offer from another buyer after accepting an offer from someone else.
Example: If a buyer has had an offer accepted on a property, but then the seller accepts a higher offer from another buyer before contracts are exchanged, the original buyer has been gazumped.
Gazundering is when a buyer lowers their offer just before exchanging contracts, often to exploit the seller’s desperation to sell.
Example: If a buyer has agreed on a purchase price for a property but then lowers their offer just before the exchange of contracts, the seller may feel pressure to accept the lower offer due to their need to sell.
Kerb appeal refers to the attractiveness of a property’s exterior when viewed from the street. It is people’s first impression of your property, and it can significantly impact its perceived value.
Good kerb appeal signals that the property is well-maintained and cared for, making it more attractive to potential buyers. It involves various aspects, such as landscaping, the condition of the front door, and the driveway.
Improving your property’s kerb appeal can create a lasting impression and make your property stand out from others on the market, potentially resulting in a higher sale price.
Equity is the value of a property minus any outstanding mortgage or other debts secured against it.
Example: If a property is worth £500,000 and has an outstanding mortgage of £300,000, the owner would have £200,000 in equity.
Capital Gains Tax
Capital Gains Tax is a tax on the profit made when selling a property, calculated as the difference between the sale and purchase prices.
Example: If a seller purchased a property for £200,000 and sells it for £300,000, they would be subject to Capital Gains Tax on the £100,000 profit.
A Building Survey is a detailed inspection of a property to assess its condition, typically carried out before purchasing a property.
Example: If a buyer is considering purchasing an older property, they may commission a Building Survey to identify any potential issues with the property, such as structural problems or maintenance requirements.
The Land Registry is a government organization responsible for maintaining records of land and property ownership in England and Wales.
Example: When a property is sold, the buyer’s solicitor or conveyancer will typically register the change of ownership with the Land Registry to ensure that the property’s ownership records are current.
An easement is a right to use another person’s land for a specific purpose, such as accessing a property or running utilities.
Example: If a property does not have direct access to a public road, it may have an easement allowing the owner to use a private road or path across another person’s land to access the property.
A Title Deed is a legal document that provides proof of property ownership and details any restrictions or obligations associated with the property.
Example: When a property is sold, the seller’s solicitor or conveyancer typically provides the buyer with the Title Deed as part of the conveyancing process.
Exchange of Contracts
The exchange of contracts is the point in the conveyancing process where the buyer and seller exchange legally binding contracts, confirming the sale and purchase of the property.
Example: Once the buyer’s solicitor or conveyancer has completed their checks and searches and the buyer has arranged for the transfer of funds, the exchange of contracts can take place, and the sale becomes legally binding.
Completion is the point in the conveyancing process where the buyer officially takes ownership of the property, and the sale is completed.
Example: On the day of completion, the buyer’s solicitor or conveyancer will transfer the purchase funds to the seller’s solicitor or conveyancer, and the keys to the property will be released to the buyer.
The world of property can be confusing enough, and the jargon used in the industry can make it seem even more overwhelming.
With that in mind, we hope this guide helps you navigate the jargon and technical terms you may come across in the UK property market.
We’re always looking for ways to improve our content, so if you can think of more jargon terms we’ve missed, please mention them in the comments!