Understanding Buying Phrases: A Guide for Property Buyers

2024-01-01

Purchasing a property involves understanding a variety of industry-specific terms and phrases. To help you make informed decisions, we've broken down some key terminology you'll encounter when buying a property. Key Buying Phrases:

Leasehold: Ownership of the property for a set period, but not the land it stands on, which is owned by the freeholder.

Freehold: Outright ownership of the property and the land it is on.

Chain Free: Indicates a property is being sold without the seller needing to buy another property, simplifying the transaction.

Contract: The legally binding agreement signed by the buyer and seller, outlining the obligations of both parties.

Service Charge: A fee paid by the property owner for the maintenance of communal areas and, if relevant, the surrounding estate.

Exchanging Contracts: The stage when the vendor and buyer sign a document, making the purchase of a property or piece of land legally binding.

Completion: The final stage of transferring property ownership, where funds are paid, and documents are dated.

Handover: When the owner officially takes possession of the property from the developer. Keys are handed over, meter readings are checked, and a final property check for snagging is performed.

Stamp Duty (SDLT): A tax paid on property purchases above a certain value.

LTV (Loan to Value): The ratio of the mortgage loan amount to the property value, expressed as a percentage.

Conveyancing: The legal process of transferring property ownership from one person to another.

Gazumping: When a seller accepts a higher offer from a new buyer after already agreeing to an offer from another buyer.

Bridging Loan: A short-term loan used until permanent financing is secured or the existing obligation is removed, often used in property transactions.

Snagging List: A list of defects or unfinished work in a new-build property that needs to be addressed by the developer before the buyer moves in.

Surveyor: A professional who assesses the property for structural integrity, potential issues, and value.

Equity: The difference between the market value of a property and the amount still owed on the mortgage.

Ground Rent: A regular payment made by the leaseholder to the freeholder as part of a lease agreement.

Understanding these terms will help you navigate the property-buying process with greater confidence and clarity. Whether you're a first-time buyer or an experienced property investor, being familiar with this jargon ensures you can make informed decisions and have smoother transactions.