Real Estate Terminology


When buying a house for the first time, all the new jargon can feel overwhelming. What does conveyancing mean? What are the title deeds? And do you need to know about missives? Check out our Lovell Homes glossary to find all the legal, financial and property terms every first time home buyer needs to know.




Absolute Title
Absolute title is the complete and outright ownership of a property.

A sum of money lent enabling the borrower to purchase a property (usually by a bank, building society or similar organisation).

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Banker’s Draft
This is a cheque signed on behalf of the bank by a manager or one of his authorised staff. Because it is not signed by the customer it is treated as being equivalent to cash.

Bridging Loan
Usually arranged through a clearing bank, but occasionally through a building society, a loan arranged over a short period until permanent funds are available.

Build Complete
This is the point at which the house is ready for its final NHBC (National House-Building Council) inspection, at which point the CML (Council of Mortgage Lenders) certificate will be issued.

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A charge is an entry in the Land Registry record that indicates the offering of a property as collateral for a loan (for example, a mortgage).

An insurance policy or property pledged as a guarantee of repayment of a loan.

When a transfer of property from vendor to purchaser takes place and in exchange for the balance of the purchase price, the necessary documents are handed over. This describes the point at which ownership is transferred to the purchaser.

A contract is legally binding. When applied to the sale of a property, this is a document which comprises two identical parts, one signed by the purchaser and the other by the vendor. At the moment of exchange, both parties are legally committed to completing the transaction, at which point ownership of the property transfers from one to the other in full exchange for payment of the full purchase price.

The deed which, in the event of a freehold property having unregistered title, transfers ownership of said title to the purchaser. In the event of a property being leasehold, the deed remains the same but is called an assignment, with further change being that if the title is registered the deed is then called a transfer.

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Deeds are legal documents confirming your entitlement to ownership of a property.

A deposit is a percentage of the full purchase price, normally 10%, which is paid by the purchaser on exchange of contracts.

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Enquiries Before Contract
Prior to the purchaser’s solicitor allowing the purchaser to sign the contract, either party is fully entitled to ask a collection of detailed questions regarding many aspects of the prospective property for purchase, and the vendor or his solicitor is requested to answer these fully before any contracts may be signed. This may also be called preliminary enquiries.

Equity is the value remaining on a property after all sums relating to it have been deducted.

Exchange of Contracts
The contract becomes legally binding at the stage in the transfer of a property when the signed part of the purchaser’s contract and the vendors signed part are exchanged between the two parties.

When, in front of a witness, a deed is signed, sealed and delivered.

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The outright and absolute ownership of land and any property which stands on it.

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Ground Rent
A payment made at specific times as required under the terms of the lease.

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Home Demonstration
A home demonstration is a meeting to demonstrate the property’s fixtures and fittings to the purchaser. This should take place during site and sales normal working hours.

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Single payment for a guarantee policy covering lenders in the event of the sum they advance being higher than the average amount normally applied to a purchase price.

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Land Registry
An official government office which registers and maintains all details of land ownership and any changes relating to that ownership.

Land Registry Charge
A fee related to the value of the property being purchased for registering the ownership of the property in a new owner’s name.

This is the ownership of a property for a fixed term. This will usually include payment of ground rent on a pre-set term basis.

A situation where a property is built on land owned by a person or organisation other than the owner of the property that is erected on the land. The leaseholder will have occupational rights for a fixed term in accordance with the specification of the lease assignment, which is of course subject to any conditions contained within the lease.

The person or organisation who authorises and grants a lease.

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A mortgage is a financial loan to enable the purchase of a property. A mortgage is also called a legal charge. A deed is drawn up which pledges freehold or leasehold property as security for a loan. If the mortgage payments are not paid in full on the due date, it gives the lender (such as the bank or building society) well defined rights to the property, including the power to sell the same if the lender so wishes. In accordance with the agreed terms of the mortgage, when the loan advanced is repaid with all due interest, these rights are completely cancelled. There are many types of mortgages available, such as 100 percent mortgages.

Mortgage Guarantee Policy
In the event of the loan required by the purchaser exceeding the normal maximum advance, the amount of loan may (subject to agreement) be increased by the issue of a mortgage guarantee insurance policy from a recognised insurance company. The premium for this policy is then paid by the borrower.

Mortgage Interest
In return for the loan that has been advanced on a property by the lender, you will pay a certain sum in interest. The rate of interest can be affected by economic conditions prevailing at any given time and the general financial state of the lender. This will therefore lead to a fluctuation of rate unless you have a ‘fixed rate’ mortgage.

Mortgage Protection Policy
An insurance policy is taken out against a mortgage which ensures that, in the event of your death or sickness, the full outstanding amount of the loan will be paid off. It is also possible in certain circumstances to take out a similar policy, which ensures that in the event of the borrower’s redundancy, the mortgage payments are met for a fixed period. This is invaluable as it allows time for the borrower to find alternative employment.

Mortgage Term
When a mortgage is arranged it will be for a fixed period of time.

The lender.

This simply means the borrower.

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NHBC - National House-Building Council
The authoritative body which provides insurance backed warranties to the majority of new homes constructed in the United Kingdom. Lovell is an NHBC registered builder.

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Also known as capital sum, meaning the amount of the loan on which interest is calculated over the mortgage term.

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The mortgage is finished when the final payment is made by the borrower. In the event of a mortgage being repaid earlier than the agreed fixed term, some organisations make a specific charge called a redemption fee. If applied, this fee will vary dependent upon the lender’s terms.

Roofed In
The point at which the roof is fully complete on a new property.

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Questions asked of various bodies (local authority, Environment Agency, etc.) about a property in which a potential purchaser has an interest, through their solicitors.

Second Charge
A legally binding agreement whereby an organisation or individual who has advanced additional monies above the initial mortgage or loan has, in the event of due repayments not being made, the right of retention of property - but only in a secondary way to the main mortgage.

Site Manager
This is the company representative who is responsible for the day-to-day operational control of an individual housing development.

Subject to Contract
In the event of the purchaser and the vendor having agreed terms ‘subject to contract’, this means a provisional agreement has been made either verbally or in writing, but either party may still withdraw from the transaction without having to give any reason for so doing.

Action carried out by way of inspection of a property by an independent surveyor, usually on behalf of the person intending to purchase the property or financial body

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Telegraphic Transfer
The purchaser’s solicitor will often use this method of transfer of monies during the completion process to move the balance of the purchase price of the property to the vendor’s bank. On the receipt of this sum the vendor’s bank will instruct the vendor’s solicitor that it has been received, and at this point the vendor’s solicitor will then request the vendor to release the keys of the property to the purchaser.

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Under Offer
This is when a vendor has received an offer either verbally or in writing for the property, but no contracts have been formally exchanged.

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Valuation Report
A professional assessment of the value of the property for mortgage purposes, made by a person nominated by the organisation that has received the mortgage application.

A vendor is an individual, company or organisation which owns a property and wishes to sell it.

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