Jargon Buster July

July 2022

When it comes to the world of property, there are a lot of terminologies used that can be confusing for anyone, particularly if you are new to the housing market. We have collated a wide range of different key terms that you may hear throughout the process to help you understand more about when it comes to buying or selling a property.

Chain - When there are multiple properties involved in a transaction, e.g. someone needs to sell their property to proceed with another, this is referred to as a chain.

Conveyancing - The process of moving the legal ownership of a property/land from one person/s to another.

Energy Performance Certificate (EPC) - An Energy Performance Certificate is a legal requirement that all properties, apart from listed buildings, should have when they are placed on the market. The certificate shows a rating for the current energy efficiency of a property and makes suggestions on how it can be made more efficient.

Exchanging contracts - When a house sale is nearing completion, contracts will be exchanged, meaning the sale of the home is now legally binding between both parties.

Gazumping - This is a term and scenario that is generally frowned upon in the housing market. Gazumping happens when a buyer has an offer accepted on a house and the seller then proceeds with a higher offer from another party and therefore the original buyer loses out.

Handover - When a property completes, the handover is the exchange of keys, which officially hands over the property to the buyer. This is also where you are likely to learn any additional information about the property that you will require such as alarm codes, appliance guarantees etc.

House in Multiple Occupancy (HMO) - Sometimes called a house share, this is where three or more people not in the same family live in the same household and share amenities, such as reception rooms and bathrooms.

Indemnity Insurance - An indemnity insurance is a protective insurance policy taken out during a property transaction, which will cover the policyholder against legal property issues (such as not paying a leasehold payment for a number of years) that would be difficult to resolve.

Joint Agency Agreement - The owner of a property can sell with multiple agents at once, which is referred to as a joint agency agreement.

Land Registry - The land registry is a department in the government, which registers land and property in England and Wales.

Listed Building - A listed building can be either Grade II listed, Grade II* listed, or Grade I listed, which all mean that the building or certain elements of the building are of historical interest.

Maintenance Cost (service charge) - A service charge is a regular payment made to maintain the area around the property, typically seen on a development. This can include gardening, cleaning, electricity for common areas etc.

NHBC Warranty - An NHBC Warranty is usually assigned to new build properties (typically a 10 year warranty) that covers issues with the house, which can include but isn’t limited to foundational and structural issues.

Off-Market - When a house is to be sold but it is not published online - this means that the sale is discreet and only people who are on the chosen estate agent’s database can hear of or view the property. This information is shared at the agent’s and vendor’s discretion.

Peppercorn Rent - Peppercorn rent is small ground rent charges.

Probate - Probate is the process of administering and organising the assets of a deceased person’s estate. Either a court will point an executor, or there may have been a named executor in the will, and their role is to administer the process of probate.

Property Ombudsman - The Property Ombudsman is a scheme in the United Kingdom that helps consumers settle disputes with property businesses, including estate agents.

Snagging - Snagging is not an official term, but is more used as slang in the construction industry to describe the process of inspection and final touches on a new build property.

Sold STC - Sold Subject to Contract (SSTC) is when a property is sold but not legally bound.

Under Offer - When a vendor has accepted the offer for a property but the buyer has not sold the property they wish to tie to the sale. The property will then appear as under offer online.

Stamp Duty - Stamp duty is a payable tax when you buy a property over a certain threshold.

Tenures: Freehold, Leasehold, Commonhold - There are different ways in which you can own a property.

Freehold is where the property owner owns the land that the house stands on and so no fees are paid.

To own a Leasehold property means to own the house itself for a fixed term, but not the land it is on. Leasehold homes are covered by a lease, which will specify certain things to do with the house and any payments that need to be made. Owning this type of property will mean that you will need to pay ground rent to the freeholder. Ground rent is usually a small fee that is paid every 6 months to a year. A lease will also have a term, meaning that it will eventually run out, however, most properties have long leases. In the case of apartments or shared developments, there can be a service charge.

Commonhold is typically seen in apartments and means that you own the freehold but the common areas in the building are usually owned and managed by all of the owners. With this type of tenure, there is no restriction on how long you can own the property.