Reference
UK property glossary
Plain-English definitions of the property terms you’ll meet when buying, selling, renting or investing in the UK.
- Assured Shorthold Tenancy (AST)
- The most common type of residential tenancy in England, giving tenants the right to live in a property for a fixed or rolling period.
- Base rate
- The interest rate set by the Bank of England, which influences the rates lenders charge on mortgages and pay on savings.
- Buy-to-let
- Buying a property specifically to rent it out to tenants, usually as an investment for rental income and potential capital growth.
- Chain
- A sequence of linked property transactions where each purchase depends on another completing. A “chain-free” sale has no such dependency.
- Completion
- The final stage of a purchase, when the balance is paid, ownership transfers and the buyer gets the keys.
- Conveyancing
- The legal process of transferring property ownership from seller to buyer, handled by a solicitor or licensed conveyancer.
- EPC
- An Energy Performance Certificate rates a property’s energy efficiency from A (most efficient) to G. One is legally required when a property is sold or let.
- Equity
- The share of a property you own outright — its market value minus any outstanding mortgage.
- Exchange of contracts
- The point at which a property sale becomes legally binding and neither party can withdraw without penalty. Deposits are paid at exchange.
- First-time buyer
- Someone purchasing their first home who has never previously owned property. First-time buyers may qualify for reduced stamp duty in some parts of the UK.
- Fixed-rate mortgage
- A mortgage whose interest rate is locked for a set period (commonly two or five years), keeping monthly payments predictable during that term.
- Freehold
- Ownership of both a property and the land it stands on, with no time limit. Most houses in England and Wales are sold freehold.
- Gazumping
- When a seller accepts a higher offer from another buyer after already accepting yours, before contracts are exchanged.
- Gazundering
- When a buyer lowers their offer at the last minute, shortly before exchange of contracts, often to pressure the seller.
- Ground rent
- A charge a leaseholder pays to the freeholder for the land a leasehold property sits on. New long residential leases can no longer charge meaningful ground rent.
- HMO
- A House in Multiple Occupation is a property rented by three or more tenants forming more than one household, sharing facilities. Larger HMOs require a licence.
- LBTT
- Land and Buildings Transaction Tax is Scotland’s equivalent of stamp duty, with its own bands and thresholds set by the Scottish Government.
- Leasehold
- Ownership of a property for a fixed number of years under a lease, but not the land it sits on. Common for flats. The leaseholder usually pays ground rent and service charges.
- Loan-to-Value (LTV)
- The size of a mortgage as a percentage of the property’s value. A £180,000 mortgage on a £200,000 home is 90% LTV. Lower LTV usually means access to better interest rates.
- LTT
- Land Transaction Tax is the property purchase tax in Wales, set by the Welsh Government, with its own bands and no first-time buyer relief.
- Negative equity
- When a property is worth less than the outstanding mortgage secured against it.
- Remortgage
- Taking out a new mortgage on a property you already own, either to replace the existing deal or to release equity.
- Rental yield
- A measure of rental return as a percentage of the property’s value. Gross yield is annual rent divided by price; net yield deducts running costs first.
- Service charge
- A fee leaseholders pay towards the maintenance, insurance and management of shared parts of a building or development.
- Stamp Duty (SDLT)
- Stamp Duty Land Tax is a tax paid by the buyer on property purchases in England and Northern Ireland, charged in tiers on the portion of the price within each band.
- Under offer
- A property status indicating the seller has accepted an offer but the sale has not yet completed.
- Variable-rate mortgage
- A mortgage whose interest rate can change over time, often tracking the Bank of England base rate or the lender’s standard variable rate.
- Vendor
- The legal term for the seller of a property.