Skip to main content

Have you recently started your property investment journey and you are confused with all the property jargon you come across? While many investors see property as a hands-off option and delegate the management of their portfolios to other property experts, it is still crucial to understand all the words and expressions of the property world.

Therefore, we thought we’d break down a lot of the specific terms you’ll come across when delving into your property investment journey, to ensure you’re all clued up.

Arrangement fees

The fees charged by a mortgage lender or broker to arrange a loan.


To transfer the right or interest in a property from one person to another.

Assured Shorthold Tenancy (AST)

The most common type of tenancy if you rent from a private landlord or letting agent.


The legal term for money that is overdue. If left unpaid, it may result in the lender repossessing the property.

Break Clause

A tenancy agreement clause that allows either the tenant or landlord, to end the tenancy agreement during the fixed term.

Bridging Loan

A short temporary loan to enable a person to buy a property before selling another property to raise the funds.

Buy-to-Let (BTL)

The basic process of buying a property with the sole objective of letting the property to a tenant upon purchase.


Usually represents the amount of money you have put into a property, investment or deposit.

Completion Statement

The bill for the purchase of a property, laying out what you need to pay.


The legal transfer of a property from the owner to the buyer.

Credit Reference Search

Also known as a credit check, when a company looks at information from your credit report to understand your financial behaviour. Many landlords use external companies who report on the tenants’ financial suitability to rent.

Draft Contract

A short document written by the seller’s solicitor, which covers the basic information about the prospective sale, such as the price, deposit, and any relevant details from the title deeds. It only becomes final at the point of contracts exchanged.

Energy Performance Certificate (EPC)

A certificate that shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. It is displayed as two graphs – the energy efficiency and environmental impact of the property. Each is graded from A (the best) to G (the worst).


Ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets.

Exchange of Contracts

When the two legal firms representing the buyer and seller swap signed contracts, and the buyer pays a deposit.


A type of property ownership, where a person or organisation has outright ownership, forever, of a property and the land on which it is built.

Ground Rent

The monthly fee that a homeowner pays to the holder of the leasehold property.

If the property has a leasehold, you can expect to pay a ground rent for living on that land.

If the property has a freehold, essentially own the land, but you are required to pay ground rent even if you have a mortgage and own the property.

The annual charge levied by the freeholder on the leaseholder of a property.


A house of multiple occupancy, common term which refers to residential properties where ‘common areas’ exist and are shared by more than one household.

Home Buyer Survey

A non-intrusive visual inspection, in which a surveyor will inspect visible areas in a property to report on the condition of the home and highlight any defects. These are graded on seriousness and their need for attention.

Individual Savings Account (ISA)

A type of long-term, tax-free savings account. You can currently save up to £20,000 per tax year into an ISA. The tax year runs from April 6 to April 5.


Usually carried out before a tenant moves into a property to detail its physical condition. Usually by way of physical description and photographs. This is then used should any dispute arise over damage caused by the tenant during their stay in the property.


A contract between the leaseholder and the building landlord that gives you conditional ownership for a fixed period of time.


The purchase of a lease from the freeholder for the right to live in the property for a set number of years. You won’t technically own the property outright, the freeholder (or landlord) will continue to own the property and the ground it sits on.

Loan-to-Value (LTV)

Measured as a percentage, LTV ratio is a number of lenders use to determine how much risk they’re taking on with a secured loan. It measures the relationship between the loan amount and the market value of the asset securing the loan.

Maintenance / Service Charge

A monthly fee that leasehold properties (usually flats) will be subject to a charge, which covers the insurance and maintenance of public areas such as stairwells, entrance etc.

Mortgage Valuation

A specific type of assessment done by the mortgage lender to help them confirm the property’s value. It’s also used to see if the property will be a suitable security for the loan you’ve applied for. Your lender will usually arrange a mortgage valuation.

Peppercorn Rent

Usually associated with ground rent, peppercorn is a metaphor for a very small cash payment or other nominal consideration.

Preliminary Enquiries

Also known as enquiries before contract, form part of the due diligence carried out by a prospective buyer in a property transaction. Additional enquiries may also need to be made to address specific concerns which arise during the due diligence process.


The legal process under which a deceased person’s estate is managed. For inheritance tax purposes, the property may need to be valued and this is typically carried out by the district valuer who represents the Inland Revenue. Contracts cannot be exchanged on a property until probate has been granted.

Property Auctions

A sale conducted at a certain time, either online or at a physical location, where competing buyers bid openly for a property and the highest bidder wins. The buyer / highest bidder, will pay a non-refundable reservation fee and will have a longer completion timescale, giving the buyer time to sort mortgage finance.

Rent-to-Rent (R2R)

Also known as multi-let, rent to rent is a term that involves taking control of a property without buying it, buy renting it yourself and then you sub-let (with permission) the individual rooms.


The process where the lender takes ownership of the property, if mortgage repayments aren’t being made.

Return on Investment (ROI)

A metric that helps investors evaluate the amount of money returned, in comparison to the amount of money put into the investment.

Serviced Accommodation

A type of furnished accommodation, which is available for a short or long-term stay, usually only let on a night basis.

Stamp Duty Land Tax (SDLT)

An amount paid to the government upon the purchase of a property or land, over a certain price.

Subject to Contract

Where an offer has been made on a property, which the seller has accepted. The sale is not yet legally binding though, meaning it is subject to contract. The sale will only be complete once the paperwork and contracts are completed.

Title Deeds

A documents showing the chain of ownership for land and property. They can include conveyances. contracts for sale. wills.


A term often used by estate agents to cover the process of them giving an opinion of the open market value of a property.


The person who owns or is selling a property.


An annual return, generated from a rental property stated as a percentage, expressed as a percentage of the total property value.

Succeed with Sourced

Our team of property experts have helped many newbie property professionals to succeed in the market. We provide them with all the training they need to build and scale their portfolios and have ongoing support from a team that has over 70 years of experience.

Our huge network of over 150 franchisees, which comprises of builders, estate agents, property developers, landlords, sourcers and more, is also available to provide guidance and help, to anyone who asks for it.

Find out more about how to build profitable property businesses, by downloading our prospectus.