The amount of additional funds that could be raised following a remortgage of the size specified by LTV required.
The money lent to you as a loan or mortgage.Adverse credit
A poor credit score or rating. Amount due
The amount of rent legally due for the specified rental period.Amount received
The amount of rent received during the specific rental period.
Annual Percentage Rate. This is the true cost of borrowing as it also includes administrative charges associated with the loan. It’s the one you should use with which to compare the borrowing costs of different loan providers.Arrangement fee
The charge levied by lenders for arranging a loan. It can often be out of all proportion to the work done and can be significant.Arrears
The outstanding overdue loan payments.Assignment
The transfer of a lease from one party to another.Balance
The sum of the amount due and amount received during the specified rental period.
This is shorthand for the Bank of England borrowing rate. It’s often used by lenders when quoting their borrowing costs. Frequently special lending deals use it as a benchmark i.e. the rate is 1% over ‘base’.Bond
Deposit paid by tenants to secure a rental property. It is their to ensure should any damage be caused by the tenant that the landlord has access to means that can be used to effect the repairs.Broker
These are financial ‘middle men’. They act for their client to source the most suitable products for them. Landlords would most commonly come across them when trying to locate a mortgage or insurance policy.Buy-to-let
A generic term adopted by the residential investment industry with which to label itself.Capital
A financial expression that describes a store of wealth.Capital appreciation
The increase in the value of a property.Capped Rate
A loan where the interest rate is prevented from rising above a predetermined level i.e. it’s cap.‘Cash back’
A term that refers to the repayment of monies to the borrower on taking out a loan.‘Caveat emptor’
Latin expression that means ‘buyer beware’. Traditionally used by surveyors to remind purchasers that you better be sure on what you are buying before you hand over the money.CCJ County Court Judgement
– this is the ruling issued by the Courts where a debtor has failed to pay off their debts. It is used by landlords and particularly credit reference agencies for identifying tenants that may represent a financial risk.Chattels
Items in a property that can be moved as a posed to fixtures which are attached to the structure.Completion
Often referred to in respect of a property purchase as the day when a property legally transfers from one party to another.Content insurance
This insurance covers items within the buildings fabric.Contract
Legally binding agreement most commonly referred to during the purchase of a property.Conveyancing
This is the legal process of transferring the legal rights of ownership from one party to another.Covenant
A restriction placed on the use of land by an adjoining land owner.‘Crashpad’
Microflat found in city centres, meant for use by urban professionals who would often have another family home in the country. Modern version of the ‘pied de terre’.Credit check
The process that is undergone to ascertain the financial worthiness of an individual. Undertaken by lenders and landlords prior to entering into an agreement. Date due
Date that the rent is legally due according to the Tenancy Agreement. It is generated by the Property Manager using the Start Date and Frequency.
Date of entry
Scotland. The date the buyer takes possession of the property. Date valued
The date when the property valuation was carried out.Deed
A legal document that normally contains an undertaking between parties.Deposit
Money used to secure purchase of a property or by tenant as a bond to secure a rental property.
The Description of tenancy unit is important when a property is divided into a number of separate letting units i.e. where rooms or flats are rented separately so that the tenancy can correctly identify the tenant and their accommodation.
charges paid out by solicitors in connection with the purchase or sale of a property. These include local authority searches, land registry feeDiscount rate
A mortgage interest rate which is below the prevailing rate for a limited period of time.Early redemption
The ending of a loan before the period has run its full course. Often associated with having to pay a fee to the lender which, is referred to as an early redemption charge.Endowment
The investment savings policy which traditionally accompanied a mortgage and was the main ‘repayment vehicle’ for a loan. As a result of falling returns during the 90’s they have lost credibility in certain circles.Equity
This is a measure of the capital in a property which does not have a loan secured against it. For example a £100,000 house with a £75,000 loan would leave the owner with £25,000 of equity.Estimate date
The date that the property’s value was estimated.
The value of the property on the given date.
The exchange of contracts is the point when the purchase of a property becomes binding on the purchaser. At this point they are required to pay over a non-refundable deposit which is forfeited should the purchaser fail to complete the purchase. Existing equity
The equity is the sum remaining as a result of current value of the property or purchase price if the former is not given, minus any outstanding loans.Expiry of conditions
Where a loan has an introductory rate it is possible to record the date when this expires. Frequently the mortgage company applies a significant charge for the early redemption (repayment) of this type of loan.
The degree that the investor is subject to the financial risk inherent in any investment.Fixed rate
A mortgage with a loan that has a fixed rate of interest for part or all of the loan period. Fixtures
Items fixed to the building and included in a sale unless specifically excluded.Flexible mortgage
A mortgage where over and underpayments are accepted.Flying freehold
Where the owner of the freehold does not own the property below i.e. where a bedroom of a house projects over the entrance hall of another property.Freehold
The most complete form of ownership where the holder of the right owns the land and even the air above it.Frequency
How often the rent is due as set out by the Tenancy Agreement.
This field identifies a property as furnished or unfurnished. It’s important in setting the Terms of the tenancy agreement N.B. an unfurnished property can still include white goods, carpets and curtains.Gazumping
Term used to describe the practice of purchasing a property after a sale is agreed by offering a higher price.Gearing
Financial expression referring to the ratio of income generated by an asset compared to the costs of borrowing the funds to secure it. A highly geared property is one where a high proportion of the rent is paid out in loan repayments whilst the opposite is true for a lowly geared investment.Generate
Clicking on this button produces a form utilising information from the selected property and tenancy. The form is then automatically saved as a generated form.
The rent paid by a leaseholder to the freeholder in return for the use of their land on which the leaseholders property is situated.Guarantor
A person who commits to being responsible for a loan in the event that the borrower can no longer make repayments.HIPs Home Information Packs.
To be introduced in summer 2007. These packs will be mandatory for all sellers of residential property and will contain basic information about the repair and condition, evidence of deeds and local authority searches. It is anticipated that they will cost between £700-1000.Homebuyers report
A cheaper and more basic surveyors report carried out for the purchaser prior to exchange. A homebuyers survey will not include an inspection of the loft.IFA Independent Financial Adviser
– regulated financial adviserInterest only
A type of mortgage where only the interest is paid and the outstanding balance always remains. This ultimately is normally repaid using a repayment vehicle.Land Registry
This is the government body responsible for maintaining the registry of land ownership in England & Wales. It allows people to know who owns what piece of land and is also fundamental when it comes to the transfer of land from one party to another through the sale or purchase of land or property.Loan Interest
Interest payments on a loan. These payments are deductible in calculating your overall income tax liability under the land and property section on your personal tax return.
Used in the Property Manager to define whether the loan is a mortgage or unsecured personal loan.
The document that contains details of the rights of a leaseholder in respect of their property.LIBOR
London Inter Bank Offer Rate. This is the rate that banks are prepared to lend to each other. It’s another benchmark rate against which other loan interest rates can be ‘pegged’.Local authority search
The check carried out by conveyancers with the Local Authority to check for factors that might affect the value of a property. These include: mining activity, planning restrictions, etc.LTV
Loan to value is an important ratio that measures the size of a loan in relation to the value of a property. This is important when looking at the size of the mortgage available to a purchaser (max normally 85%).Market Value
This is the criteria used by surveyors to value property. It’s assessed as what a standard buyer would pay for the property in its current state at the time of valuation.Maisonette
A two storey horizontally arranged living space like a flat but with it’s own private entrance.Management company
A company set up to organise the running of communal services found in a block of flats such as cleaning, decoration or concierge. The company can be owned by the residents or by a specialist management company.Memorandum of sale
A written summary of the terms and conditions of the sale. Sent to seller, buyer and solicitors once the sale is agreed.Micro flat
A very small purpose built apartment where the size is below 350sft and often found in city centres. Designed for one person living where living/bedroom/kitchen functions are combined into one space. Monthly cashflow
Measures monthly revenue (income after deductions) and is calculated by taking regular expenses including loan payments from the rent.Monthly outgoings
Regular expenses incurred every month or can be calculated on a monthly basis.
The rent for the property calculated on a monthly basis as specified in the Tenancy Agreement.Mortgage deeds
The legal agreement between the lender and borrower that contains the terms of the loan agreement.Mortgagee
The mortgage provider. Move out
The date on which the tenant vacates the property.LTV required
This is to enable the user of the Property Manager to specify the size of any loan required as a proportion of the Estimated Current Value of the selected property.Negative equity
Where the property value is less than the purchase price. Net costs
Comprises of cost of purchase, purchaser’s costs, works and other costs.
Net profit / loss
Net value minus net costs.Net value
Value of the investment property net of seller’s costs.
National House Building Council provides insurance for builders, which also acts as a guarantee for purchasers and covers new build property against defects for 10 years.Non – status
Refers to the financial credentials of the borrower i.e. not in guaranteed employment or with poor credit history making obtaining a standard mortgage impossible.Off-plan
Buying a new build property where construction has yet to be started and therefore making a decision based purely on the plans for the development.
Original LTV (%)
The size of the loan expressed as a percentage of the original purchase price of the property.
Other capital costs incurred in establishing the investment property. Payment date
The date the rent was received.Payment type
In the Property Manager under loans it is possible to record the type of payments as either capital and interest or where no payments are made towards the original capital sum, interest only.
The collective name for the entire holdings of a property investor.Portability
Refers to the ability of a borrower to transfer a mortgage from one property to another. Potential mortgage
The size of the mortgage generated by the figure input in LTV required.
The payment required for insurance.Preview
View blank forms in either word or as a PDF.
The main contact for a tenancy.
The date of Final Completion.
The price paid for the property. Purchasers costs
Comprises of legal costs, stamp duty, agents, surveyors, mortgage costs and miscellaneous costs.
The interest rate being charged by the lender. It is best to use a standard measurement such as the APR to enable the comparison of rates. The comparison of these rates may be complicated because some mortgages have an introductory rate.
The ending of a loan agreement, normally involving the payment of some or all of the outstanding amount.Remortgaging
The replacement of the existing mortgage by another, which is often used to repay the outstanding loan. Where the new mortgage is larger than the existing, there will often by a return of equity to the borrower in the form of a cash payment. Rent due
Where an informal arrangement is agreed with the tenant on when the rent is due which differs from that contained in the Tenancy Agreement.
The traditional form of property loan where a payment is made that covers the interest charges and also goes towards the ultimate repayment of the loan over the agreed term of the mortgage.RICS
Royal Institute of Chartered Surveyors. The professional body for surveying professionals.Right to buy
A scheme originally set up in the 80’s which allows tenants to purchase their property often at a discount to the market value.Ripple effect
The way increases in property value spread from their starting point (normally in London) outwards.ROCE
Return On Capital Employed. The financial gains made from an investment as a proportion of the original capital invested. Often used as a measure of the true value of your investment returns.Searches
The request for information, made by your solicitor or yourself to the relevant organisation for information about a property you are proposing to buy.Self certification
Declaration of earnings to a lender of the amount and nature of an applicants income. It is then used by them to ascertain whether they are prepared to advance the required loan.Service charge
Money paid to the management company by the tenants in return for them managing the communal services i.e. organising the maintenance of a lift, sorting out the redecoration of the external woodwork, etc.Snagging
Architectural term that refers to the process of finding faults in a new build property prior to the hand over from the developer.Sitting tenant
A person that has the right to remain in a property, although there is no tenancy agreement between the landlord and tenant.Stamp duty
Tax incurred by the purchaser of a property. Currently the threshold for the starting rate of 1% is on properties of £125k and above.Standard construction
Brick built house with tile or slate roof. Start date
The date the tenancy commences (commencing means on and including this date)
Single room property with separate bathroom and possibly kitchen. Similar to the microflat.Subject to contract
This is a disclaimer that surveyors and estate agents use to ensure that whilst a property may be under offer there is no legally binding agreement between the parties until contracts are signed and exchanged.Sum assured
The payout value of an insurance policy.Syndicate
These are groups of investors that have got together either independently or through the actions of a facilitator. Their aim is to bulk buy off plan property investments and in so doing extract a discount to the market price for these properties.TDS
Tenancy Deposit Scheme. To be introduced by the Government in an attempt to prevent disputes arising between landlords and tenants over the return of their deposit at the end of a tenancy.
The number of tenancies secured against the specified property.
The person renting a property. Term
The length of the tenancy. This has a practical minimum of 2 months when a Section 21 Notice is served concurrently on the tenant (see Landlords Bible for more guidance.)
The legal documents that provide legal ownership to a property. Total loan
Total amount of loan funds secured against a property N.B. system allows a maximum of two. If this causes a problem please go to Your Forum – bugs or fixes or e-mail us at email@example.com.Tracker rate
Where a mortgage interest rate relates to that of a benchmark rate such as the Bank of England Base Rate.Under offer
Expression used by estate agents to describe a property where the seller and purchaser have agreed the terms of a sale but have not necessarily entered a binding contract.Vacant possession
A property that is empty and therefore ready for immediate occupation.Valuation
The process by which a property is valued. Several of these can be carried out during a single purchase. The first is a valuation for the mortgage company to ensure that their security is adequately protected. Frequently the purchaser will also instruct a valuation such as a Homebuyers Report, which gives them information on the repair and value of the building.Vendor
The seller. Works
The building or renovation costs carried out on the property.Yield
The measurement of the ratio between income and capital value of an investment. Where a property is worth £100,000 and produces £10,000 of rent pa it would have a gross yield of 10%. After taking off letting agents fees and running expenses of £2,000 the net yield for the property would be 8%.
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