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Jan 25, 2023 Gifting property: Can I sell my house to my child for £1?

Gifting property to children is becoming more and more commonplace. As the price of property climbs ever higher, this is one solution families are using to get their children onto the property ladder. There are tax implications, however, and it may not be the solution to all your financial issues. Here we look at what happens if you decide to sell your property to a family member for a nominal value. Is this the same as gifting property to children? Yes. Although it will still require conveyancers to handle the legal aspects, the change in ownership will qualify as a gift. Legally it won’t be regarded as a sale, but a token value has to be involved. What do I need to do to sell my house for £1? A conveyancing solicitor will need to be instructed, in order to handle the transfer of the deeds from you to your son or daughter, or other family member. Contracts are still exchanged and completion dates confirmed. So there will still be legal fees to pay. If you own the property with a mortgage, it might not be possible to sell for a purely nominal figure like £1. If there is an amount outstanding on your mortgage, this will need to be covered by the person you are gifting the property to. So it would make sense for this to be the price of the gift. What are the other costs involved? Mortgage redemption costs for gifted property If you do still have a mortgage, are you in a discounted term? If so there will be a redemption figure to pay, along with any outstanding borrowing. Ask your solicitor to contact your mortgage provider for a mortgage redemption statement. Legal fees You will be charged legal fees by your solicitor, but as their workload is not as heavy as a conventional property sale it may be worth asking for a reduced fee. Capital Gains Tax (CGT) on gifted property You are not liable to pay capital gains tax on gifted properties if it has been your Principal Private Residence. There will be CGT to pay if it was used as a business premises or rented out. From any CGT bill you can deduct capital improvement costs, stamp duty, legal fees and estate agents’ fees. Stamp Duty Land Tax (SDLT) on gifted properties If there is no mortgage on the property, there will be no stamp duty incurred. Standard rates of stamp duty will apply if the mortgage exceeds the stamp duty threshold. Stamp duty is also paid if your child already owns another home and is either using the gifted property as a second home or renting it out. Inheritance Tax (IHT) on gifted properties This is one of the main reasons why people prefer to gift property, rather than leave it to children as part of their estate when they pass away. If you do not die within seven years of making the gift, there is no inheritance tax to pay. If parents die within three years, inheritance tax is charged at 40%. After this inheritance tax is charged at what is called ‘taper relief’, and only if the value of the gift exceeds the tax-free threshold. Income Tax on gifted properties There will only be income tax implications if your son or daughter chooses to rent out the property they are gifted, either to you or someone else. Capital gains tax will also need to be paid in this circumstances if the property is sold at a later date. Can I avoid care home fees by gifting my house? People may be tempted into thinking that gifting their property effectively ‘disposes’ of it, so it can’t be used to measure what you can afford should you have to go into a care home. However, this is seen as deliberate ‘deprivation of assets’, especially if the gift is made a short period of time before the care home fees are required to be paid. Local authorities will judge on what the intent was behind your decision to gift the property, and the value of the property will usually still be counted as part of your assets. Sign up today to be among the first to know about property for sale in your area. Can I give my child money to buy a house? Yes. If you want to help your son or daughter raise a deposit you can make a gift to them. All the beneficiary needs to do is provide written confirmation to their mortgage provider that it is a gift, so that it is clear it is not a loan that has to be repaid. Let us help value your property If you are thinking of gifting your house to your child, but are interested to know how much your property will be worth when it is transferred, please get in touch with us and we will provide a free property valuation for you.

Apr 5, 2022 Selling process - Stage 7 - Exchanging contracts on property and completing

Why is exchanging contracts so important? Exchanging contracts and completing are the final hurdles of selling your property and where things become legally binding. This is why, especially at this point, you must stay in regular contact with your solicitor to keep up with how the process is progressing. If the exchange doesn't occur then the sale isn't legal and the completion can't be actioned. What happens during exchanging contracts? The seller’s solicitors are responsible for drafting the contracts. The exchange of the contracts usually occurs once the following has been conducted and agreed upon by both parties: Preliminary enquiries carried out Local search enquires conducted Fixture and fittings to be included listed out and agreed The buyers have a confirmed mortgage offer When both the buyer and seller are satisfied with the contract, both sides are required to sign the final copies and send to each other, usually through their solicitors. The agreement to buy and sell is now legally binding, and therefore neither party can pull out without usually having to pay a hefty compensation. What happens after exchanging contracts? Once the contract is signed by both the seller and the buyer, a deposit (% of the purchase price) is paid or transferred by the buyer’s solicitor to the seller’s solicitor who then hold this deposit until the completion of the sale of your property. A completion date can then be agreed upon between the buyers and the sellers. Exchanging on a property with tenants Having tenants already occupying the property can add time to the process. Our advice is to speak with your estate agent to ensure you carry out all necessary steps that you are responsible for. Most of these steps need to be carried out before you put your property on the market. Sign up today to be among the first to know about property for sale in your area. What is completing? Completion or completing on a house is the final stage of the property sale/purchase transaction. When the seller's solicitor confirms they have received the full purchase monies you have completed. Ownership is transferred from the seller to the buyer by dating and transferring title documents. Prior to the completion date, it is a good idea to contact your solicitor to confirm the necessary steps you need to take and confirm all the costs and payments involved. What are the steps to completion? There are just a few last steps to completion! Residual money needs to be transferred from the buyer’s solicitor to you solicitor. Your solicitor should inform you once this is confirmed and then instruct the estate agents to release the keys. Other important things that happen at this stage: The legal documents needed to transfer ownership need to be handed over to the buyers You will need to move out of the property (if you haven’t already) and ensure you have left the property in the state agreed to in the contract. This includes the fixtures and fitting set out to be included or removed. Once moved out, ensure the estate agent has all the keys to the property to hand over to the buyer. Congratulations on selling your property No matter which Howards branch you work with, you can rest assured that the service is of the highest standard, backed up with industry experts at every step. Contact us today to get help selling your property. Thinking of buying property? We make it our mission to get you moved. Howard's Buying Process is our useful guide packed full of the steps and responsibilities for a buyer, as well as hints and tips to make the process as stress-free as possible. Do remember if you are buying or selling with us, our phone lines are open from 8am-10pm, seven days a week to ensure we are there for you every step of the way. If you prefer to speak to someone in person – just find the local branch to you, check their opening hours and pop in to see them – they will be glad to help you.

Apr 5, 2022 Selling process - Stage 6 - Receiving offers

A buyer wishing to make an offer needs to speak to the estate agent you have chosen to sell your property. They can do this verbally (over the phone or in person) or in writing (via post or email). However, this offer is not legally binding until exchange of contracts, therefore an offer subject to contract still allows for the price of the property to be negotiated. The estate agent must communicate all offers to the seller in writing even when the offer has been discussed verbally. Any conditions around this offer must also be included in writing. It is also the responsibility of the agent to ensure that the buyers are in the position they state and therefore able to deliver on the offer they have put forward. Sign up today to be among the first to know about property for sale in your area. Declining and accepting offers Declining an offer: One of the most common reasons for declining an offer is that the potential buyers have offered an amount lower than you are willing to accept. Other reasons might include the position of the buyers not being favourable to your requirements e.g. they have yet to have an offer on their own property for sale. You do not need to make a decision right away. Think carefully about the offer being presented to you and inform your estate agent if you wish to decline. Accepting an offer: Once you have received an offer you are happy with, inform your estate agent. Make sure you discuss all the details and agree estimated dates for exchange and completion. It can be useful to put this in writing for the estate agent and the buyer – it will not be a legally binding contract, but helps to make sure everyone is in agreement. One element to confirm is whether the property will be taken off the market following the acceptance of the offer – some sellers prefer to keep the property on the market for a while. You are not obligated to accept an offer – you can choose which offer suits you best. This may depend on the chain with the potential buyers or the value of the offer. Discuss your options and any concerns with the estate agent. Offer agreed – what now? Brilliant, you are a big step closer to selling your property! Negotiating the sale through to completion takes time and skill. There are a few tasks your chosen estate agent is now responsible for, following your acceptance of an offer: Written communication to all parties to confirm the agreed price and any conditions of the sale. Preparing a memorandum of sale. Ask the sellers and buyers for confirmation of their solicitor’s details. Take the property off the market if this has been agreed to by the seller. It is now time to work with the estate agent to: Agree a date for a survey of your property. Agree a date for the exchange contract – also known as Exchange Date. Agree a proposed date for completing on the property sale – also known as Completion Date. Not sure on some of the terms around buying and selling property? Try Howards jargon buster. During this time, your solicitors will be responsible for sending out a draft contract to the buyer’s solicitors. The buyer’s solicitors will be responsible for carrying out the preliminary enquiries. Both the estate agents and your solicitor should provide you with regular updates so that you are kept informed of the progress. Next is the final step: Exchanging contracts and completion.

Apr 5, 2022 Selling process - Stage 5 - Viewings of your property

After all the hard work you have put in, you’ll need to be ready for the people who want to view the property. Just like when you made it look its best for the photography, this is all about preparation: Make sure the front of the house is tidy and neat. Depending on the location of your property, clear space for viewers to park their vehicles. The property should be clean, tidy, well aired and well lit. If you have pets it might be best to arrange for them to be cared for during a viewing. Some people may not like dogs or cats etc. and they can serve as a distraction. If it is cold, ensure the heating is on so the property is warm and comfortable. The devil is in the detail The above points are the major considerations, but serious potential buyers will want to see every room and might want to look in any storage areas such as built in cupboards under the stairs. Every space needs to be as accessible and tidy as possible. There are a lot of articles written about extra things you can do to make your home appealing – from baking treats to create pleasant smells to placing fresh flowers on the countertops. Ultimately, a clean and tidy space, even without the extras is the best way to show off your property. After all, a viewing is a chance for someone to imagine themselves in the space, not overwhelmed or distracted by how it currently looks. Your estate agent Where possible, it is useful if an estate agent accompanies the viewers as they are the property experts and know how to sell a property. You can also provide the estate agent with a key to your property so that they can conduct viewings if you are out. Sign up today to be among the first to know about property for sale in your area. Make sure the estate agent has everything they need for the viewing, including access information. Should you need any advice on conducting viewings or what you should do in advance, speak to your estate agent for their hints and tips. Open House Events If having lots of viewings at different times is not convenient for you or if you need a quick sale, it can be beneficial to have an Open House Event. Open Houses are a very successful service with Howards Estate Agents. What is an Open House Event and how do they work? An Open House Event is a single appointment where a number of potential buyers can view the property at the same time. These can be an appointment that lasts for an hour, a couple of hours or a whole day. At Howards, we will arrange the Open House for the best possible time period for your property and your requirements. Howards manage the entire process for you. We discuss it with you first to work out how quickly you would like the event arranged and then iron out the details around that. From sending out invitations via email campaigns and SMS, contacting potential interested buyers, advertising in local press and social media to conducting the Open House Event on the day at your property, haart co-ordinate the entire event for you. Benefits of an Open House Event You only have to prepare your property for one appointment. It creates a competitive atmosphere that can cause the value of offers made to increase. Having an Open House Event may increase the number of potentially interested buyers as people may be more inclined to attend an event led by the estate agent. You can gauge the level of interest in your property by the number of people who attend the Open House. Once viewings are taking place, the estate agents should be in touch once they have received any offers from potential buyers. Next, read our tips on Receiving offers on your property.

Apr 5, 2022 Selling process - Stage 4 - Get viewings, not just views

First impressions really do count. At Howards we can help your property get viewings and offers. We use unique technology that matches your home’s best features with the things your buyers love, so they’re more likely to click, arrange a viewing and make an offer. Here are some things that you can put in place to make sure your home looks its best: The front of the property is the first thing people will look at, especially if you are going to have a ‘For Sale’ board outside. Make sure it is neat, tidy and well-kept. Keep the grass cut, clean the driveway – all the little things that make a big difference. Are there any areas (inside or out) that could do with a fresh coat of paint? It really can make all the difference in presenting your property as fresh and well-kept. Where possible, select a neutral colour to appeal to as many people as possible. Make sure the inside of the property is clean and tidy. Tidy up cluttered areas to make the property appear spacious Have as much natural light as you can (open curtains and blinds etc.) A well-lit home looks bright and homely. Give your carpets and upholstery a professional clean if you can. Open the windows to give the rooms a chance to be well aired. Complete any maintenance jobs such as replacing light bulbs and fixing doors or finish any DIY projects you had started. Gardens are an important selling aspect. Make sure yours is tidy, weeded and the grass freshly cut. Get plenty of notice of when the photographer is coming to give yourself time to prepare. The photos will be extremely important in generating interest of your property. The marketing of your property haart will help you get maximum exposure of your property to generate as much interest as possible. Keep in mind this checklist of things that will help get your home seen on and offline. The marketing of your property needs to include: Good quality, full colour property details which include a floorplan of the property and the Energy Performance Certificate. Listing on the estate agent’s website. These listings should include a detailed write-up of your home, the rooms the property features with dimensions, quality images, location map and a streetview of the area around your property. Listing on major portals such as Rightmove and OnTheMarket.com including a detailed write-up of the property particulars and a good range of good quality images. Email and SMS property alerts to potential buyers who are interested in a property like yours in the area. Professional signboards to promote your home at all times, should you agree to have one displayed. Sign up today to be among the first to know about property for sale in your area. Are you ready for viewings of your property? Click through to our Property viewing guide for some tips to assist you.

Apr 5, 2022 Selling process - Stage 3 - Should I choose a solicitor or conveyancer?

A solicitor or conveyancer will be needed to transfer the legal ownership of your property to the buyer. There is a difference between the two: A conveyancer focuses on residential property as a specialist in property law A solicitor is a qualified lawyer – as well as property law they will have training and experience in other matters such as divorce or medical malpractice A solicitor may cost a little more than a conveyancer, but if you feel the sale will be more complicated than usual a solicitor may be better placed to advise you on further legal matters outside of property law. In most cases a conveyancer will be able to see the transaction through to completion with no issues. Sign up today to be among the first to know about property for sale in your area. What does a solicitor or conveyancer do? Choosing a solicitor or conveyancer is an important factor of the successful sale of your property. They need experience in property conveyancing as well as a solid understanding of the property marketing in your area. The solicitor or conveyancer will usually be responsible for the following: Drawing up and reviewing the contracts Conducting the local searches Corresponding with the Land Registry Managing payments, including stamp duty charges Managing the collection and transfer of funds Providing you with legal advice as and when you need it. What tools can I use to help me value my property? Questions to ask before choosing a solicitor or conveyancer Most estate agents will have solicitors or conveyancers they can recommend to you, however, here is a quick guide to what to look for when choosing: Find out how much experience of conveyancing and local knowledge they have. It’s not always the best idea to select the cheapest. Make sure the quality of their work meets your standards. Different solicitors will charge in various ways. Get all the costs upfront where possible and work out what you can afford to pay and when. Positive reviews. What better way to find out if the solicitor provides a good service than to listen to recommendations from friends, family, testimonials or review sites? High quality service. Solicitors and conveyancers are likely to be busy, but still need to provide you with a high quality service. A good conveyancer will check you have understood all the details of the sale of your property. Easy to contact. It can be extremely frustrating to not be able to reach your solicitor during the selling process. Get at least one contact number and email address for you to be able to get in contact with your solicitor regularly. Opening hours. As part of making contact as easy as possible review the solicitor office hours, so you stand a better chance of getting in contact when you need to. For more details on solicitors and conveyancers, from their processes to how to decide on one for your sale, the Home Owners Alliance has a wealth of information. Three is a magic number At a minimum, it is useful to get at least three quotations and research each of these firms or individuals so you can make the right choice for you. Do your research and make a choice that’s comfortable for you. Want to book a free valuation? Contact Howards today. Next up - Help your home sell itself. Make the best first impression with advice from Howards.

Apr 5, 2022 Selling process - Stage 2 - Choosing the right estate agent for you

Choosing an agent can be a bit overwhelming. Especially if they are all promising the same things! An estate agent can help you to sell your property for the right price at the right time. However, the process of finding the right one for you can be a bit overwhelming, especially if they are all promising similar things. Use our tips to help you navigate this part of selling your home, starting with the important considerations for finding your estate agent: The important questions There are plenty of questions to ask a potential estate agent, but for a start you’ll want reassurance they can do the best job of getting you the right price for your home or property. If you have done your research, and have an idea of the price you want, be sure that this matches up realistically with what the agent puts forward. Sign up today to be among the first to know about property for sale in your area. Questions to ask to ensure a good relationship with a potential estate agent are: Are they professional in their approach? It’s important that you feel comfortable with your agent. If they are over-friendly or don’t seem invested enough, trust your gut and move on. Do they have any testimonials on their website so that you can see what other customers think of them? Other people’s experiences could help you to weed out agents that may not be what you’re looking for from your shortlist. How well known are they in your area? The more experience and expertise they have of the location, the better. Do their opening hours suit you? It is no good instructing an agent who is only open when you are at work. You might also want to establish a preferred method of contact – do you want them to call you or email you throughout the process? What fees do they charge and when are they due? You can also ask about the applicants already registered with them – are there any that may suit your property? How quickly will the agent get in touch with them to notify them that your property will be on the market? All this information will give you a good idea of if the agent is the right one for you. One extra thing to remember is that an Energy Performance Certificate (EPC) must be arranged before a property can be marketed. Will the estate agent be able to carry this out on your behalf? The Howards team are available 8am – 10pm, seven days a week. Call us today! Marketing your home The more people that see your property the better, but it also needs to reach the right people. Which of the agents will get the best exposure of your property? Your property should be exposed to people looking in your area and price range, not just a blanket-catch to all listings. Ask the following questions: Will the agent be promoting your property on their website? Will they include major portals such as Rightmove and OnTheMarket.com? How will they market your property? Social media, email campaigns, newspaper advertising – are they going to ensure your property is seen by the right people? Have a look at some examples of the properties they are currently marketing on their website – do the pictures look professional? Do you like the way the property descriptions are written? Let Howards help Howards will provide a free, up-to-date valuation, carried out by a member of our team of fully-trained professionals. We will show you the marketing we can provide and our expert local knowledge of the property market in your area. Howards has the tech to get it seen and the people to get it sold. Want to book a free valuation? Contact Howards today Howards prides itself in being transparent with our customers. For example, you can look at the Howards website to see how many properties Howards is selling in your area compared to other agents. We listen to your requirements and provide solutions to help them sell your property. We can set up open house events, accompanied viewings or set times for viewings. Our award-winning off and online marketing techniques include: Advertising on portals Rightmove and onthemarket.com. Social media Email campaigns Property alerts through email or SMS Newspaper and magazine advertising Dedicated PR Community-based events Homes with Howards Our agents focus on the reasons why you’re moving, so they understand how to help you best, and will negotiate hard on your behalf, to get the result you need. We know the housing market inside out, but you know your home better than anyone. When you instruct us, we’ll ask you what makes it special, what work you've had done, and why it’s fun, unusual or great to live in. By learning all about your home, we can find the right buyer – and get you the best possible price. Don’t run the risk of an estate agent skipping valuable details when they are marketing your home. Once you have chosen an agent, it’s time to choose a solicitor. Take a look at the next step in our guide: Should I choose a solicitor or conveyancer?

Apr 5, 2022 Howard's jargon buster

Think moving house is stressful? Then all of the added jargon that goes with the house buying and selling process can make it quite daunting. Our handy guide details some common terms and what they mean. Acceptance - If you wish to accept a lender’s mortgage offer, this document will need to be signed and returned to the lender. Amortisation - The gradual elimination of a liability, for example, a mortgage through regular payments over a set time period or the amount paid by way of capital or principle repayments on a loan annually. Annual Equivalent Rate (AER) - A notional rate that is often quoted on interest paid on savings and investments. It aims to demonstrate what your interest return would be if the interest was compounded and paid annually instead of monthly (or any other period). Annual Percentage Rate (APR) - The APR is a figure that is used to compare different mortgages. Defined by law, it includes repayments on the loan plus any fees such as booking, arrangement or redemption fees. The APR shows the true cost of borrowing, and should appear on all mortgage illustrations and quotes. Applicant - The name given to a potential purchaser, often used by estate agents/auctioneers. Appraisal Value – Property value as estimated by a surveyor. Appreciation – Increase in property value as a result of market condition changes. Arrangement Fee - This is a charge levied by the lender to cover the costs of administering and reserving the funds for certain types of mortgage. May be paid separately or added to the loan amount. Assured shorthold tenancy (ASTs) - This is the most common form of tenancy.  A tenancy can only be an AST if you are a private landlord or housing association, the tenancy started on or after 15th Jan 1999, the property is the tenants' main accommodation and you do not live in the property.  All of these must apply. Auction - A means of selling a property whereby it is listed at an auction and if the property does not reach the reserve price then it is not sold. If it does, then when the auctioneer's hammer falls that represents an exchange of contracts and the successful bidder is legally obliged to pay a 10% deposit and sign a memorandum of sale before leaving the auction. Completion usually takes places 28 days later and the buyer is not in a position to re-negotiate any of the stipulated terms and buys the property "as seen". Structural surveys and searches would have to be made in advance by a bidder. Base Rate - The lowest rate of interest a bank will charge when it lends money, used as a benchmark to set interest rates for borrowers. This rate is set by the Bank of England and is reviewed several times a year. Lenders will charge borrowers a margin above the base rate. Bridging Loan – A loan that is used to cover the overlap between the purchase of a new property and the sale of an old one. This will be a short-term loan. Building Survey – Full inspection of the property, carried out by a chartered surveyor. A detailed report will follow highlighting the condition of the property and any issues/defects. Buildings Insurance – An insurance policy that pays the cost of repair or rebuild in the event of your property being destroyed or damaged. This needs to be purchased before completion of your new property. Buy-to-let Mortgage – A type of mortgage specifically for those purchasing a property with the intention of letting the property out. Capital – Amount of money either put into buying a property or the deposit placed on a property. Capital Appreciation – Growth in the value of a property over time. Capital Gains Tax – A tax on profits above a fixed level made from the sale of financial assets such as property or shares. Capped-rate mortgage – A mortgage that sets a maximum rate on interest that a lender can charge for a specified period. Chain – Where a buyer is reliant on the completion of sale of their current property before they can complete on a purchase of a new property. Commission – An estate agent’s fee for selling the property. Comparative Search – The search that looks at sale values for similar properties in the same area as your property. Completion Date – The date of which the money is transferred from the buyer’s to the seller’s solicitor. The buyer will also become the legal owner of their new property on this date. Conditions of Sale – Details that set out the rights and duties of the seller and buyer. Contents Insurance – Insurance that covers the contents of your home such as your furniture, carpets, equipment like laptops and televisions. Conveyancing – The legal process surrounding the transfer of ownership of a property from a seller to a buyer. Covenants – The rules and regulations governing a property – these are contained in its Title Deeds or Lease. Deeds – The legal documents that prove ownership of a property. Deposit – Initial funds used as a payment upfront to a bank/financial institution in the purchase of property. Also known as mortgage deposit. Detached – A property that stands alone, and therefore not attached to another property. Disbursements - Fees paid by the solicitors on the behalf of a buyer. Examples include land registry and search fees and stamp duty. Also known as Legal Fees. Discharge Fee – Paid to some lenders for releasing their hold over a property once you have paid off you loan. This often occurs if you pay off your mortgage early before the standard term has run out. However, this is not always the case. Down Valuation – Where a lender restricts the amount you can borrow as a result of a surveyors valuation report indicates the property is not worth the sum sought. Draft Contract – A preliminary version of the contract drawn up when the sale is first agreed. This is uncorroborated version that will need to be confirmed by the seller’s solicitor and set out the conditions. Draft Transfer – A legal document issued by the purchaser’s solicitors setting out the terms and conditions of sale. Early Repayment Charge – A charge issued by the lender as a penalty if a mortgage is paid off within a specific period. Endowment Mortgage – Interest-only repayments combined with monthly premiums into an endowment policy. This is designed to pay off the loan at the end of the term. Energy Performance Certificate – This certificate measures the energy efficiency of a property using a scale of A to G. It is now a legal requirement to have a valid EPC before a property can be marketed. Equity – The amount of money either put into buying a property or the deposit placed on a property which exceeds the amount of any money borrowed against the property. Exchange of Contracts – The point at which confirmed and signed (by both purchasers and sellers) are physically exchanged. Both the buyer and the seller are now legal bound to the sale and purchase of the property at the agreed price. Fixed Rate Mortgage – A mortgage in which the interest rate is fixed/set for an agreed term or period of time. Fixtures and Fittings – These are the non-structural items included in the purchase of a property. These can include (but not limited to) light fitments, central heating boilers and radiators, bathroom suites, kitchen units, TV aerials and satellite dishes. Flexible Mortgage – An arrangement whereby you can increase or decrease your mortgage payments. Freehold – Where the owner of a property also owns the land that it is built on. Gazumping – This occurs when a seller accepts a higher offer on a property when they have already agreed on an offer from someone, prior to the exchange of contracts. Gazundering – This occurs when a buyer reduced their agreed offer prior to exchanging contracts. An example could be that the buyer has discovered some issues with the property following a survey report that was carried out, and therefore reduces the offer agreed accordingly. Ground Rent – A charge from the freeholder to the leaseholder. Guarantor – Someone who promises and signs to agree to pay the borrower’s debt or rent is the borrower or tenant defaults. Higher Lending Charge – An upfront, one-off charge to a lender to protect them against the borrower defaulting on the loan. This usually occurs on mortgages that are over 75% of the property value. Houses in Multiple Occupancy – A building of three floors or more that is occupied by three of more people. These people live as more than one household but share the use of facilities such as bathrooms and cooking facilities. Individual Savings Account Mortgage (ISA) - Interest-only mortgage linked to an ISA fund, which is designed to pay off the loan at the end of the period. Inflation - The rise in prices over time. Interest Charges – The charges that banks make on a loan, calculated as a percentage of the borrowed amount. Interest-only Mortgage – Now only offered with very strict lending criteria and aren’t available to everyone. A type of mortgage where the borrower only repays the interest on the loan for the duration of its term and repays the full loan amount at the end of the mortgage period. Joint Tenants – A form of ownership of land or property where there are two parties. If one of them passes away, their share of the property will transfer automatically to the remaining party which then gives them full ownership. Land Certificate – This document is issued by the Land Registry to the owner of the registered land as proof of ownership. This land document will include a copy of the register and the plan showing the extent of the land. Land Registry Fee – To be paid by a solicitor on behalf of the buyer to register ownership of property with the Land Registry (if freehold). Therefore once you purchase the property, you are the legal owner of the land. Land Search – This is where a formal application of an inspection of the Land Registry register. A certificate will be issued to show the current situation of the land in question. Lease – The legal document by which the Freehold or Leasehold owner of a property lets the premises or a part of it to another party for a specified length of time. Once this expires, the ownership reverts to the Freeholder. Leasehold – Where a person(s) owns a property but only for a set number of years. When the lease expires, the property returns to the freeholder. This is most common with flats; however, houses can also be built on leasehold land. Legal Fees - Fees paid by the solicitors on the behalf of a buyer. Examples include Land Registry and search fees and Stamp Duty. Also known as ‘Disbursements’. Listed Building – A building which has special architectural or historic interest which is officially listed so that it cannot be demolished or altered without prior local government approval. Maintenance Charge – Also known as service charges. These charges are the cost of repairing and maintaining external or internal communal parts of a building. These costs are charged to the tenant or leaseholder. Maisonette – An apartment, usually over one or two floors, which is self-contained and in a larger house. It will have its own entrance from the outside. Mortgage – An amount of money advanced by a lender (usually a bank or building society) on the security of a property. This is repayable over a long period of time. Mortgage Payment Protection – Insurance designed to pay your monthly mortgage for a limited period if you are unable to work due to illness, redundancy or disability. This is usually for a year. NHBC Scheme – A building guarantee that is available on some new build homes. Under this guarantee, any defects that occur within a specified time after construction are remedied. Negative Equity – When a property has decreased in value to below the level for which a loan was secured on it. Offer – The sum of money a buyer offers to pay for a property. Offer of a Loan – A formal document approving the mortgage you have requested and detailing the Terms and Conditions that apply. Office Copy Entry – The official document from the Land Registry which confirms the ownership of and borrowings against a property. Open House Event – A day or period of time of a day where a property for sale is open to a number of applicants to view at the same time. Open Market Value – The price a property should be able to achieve where there is a willing buyer and seller. Re-Mortgage – This is the refinancing of a property either by switching a mortgage from one lender to another or by taking out a second mortgage to take advantage of any equity gained by the rise in value of the property. Redemption – When a mortgage is fully repaid. Repayment Mortgage – A mortgage where the monthly payments are used to repay the interest and reduce the outstanding capital.  This means that each month you’re paying off a small part of your mortgage. Repossession – This occurs when a mortgage lender takes possession of a property due to non-payment of the mortgage the property is secured against. Retention – Where a lender has the ability to hold back part of a mortgage until certain conditions are met. Searches – A request or enquiry for information about the property held by a local authority or by the Land Registry. Semi-Detached – A property which is joined to one other property – this will be a house or bungalow. Service Charge – These charges are paid by the owner to cover the cost of providing various services which include (but not limited to) maintenance or repair of the building, communal areas, heating, lighting or security. Share of Freehold – Where a limited company owns the freehold on which a property stands and the shareholders of that limited company are the owners of the property. Short-term Tenancy – Occupancy of a rental property that starts at one day and can last for a few weeks or a couple of months. Sitting Tenant – This refers to a tenant who occupies a rental property when there is a change of landlord or the landlord decides to sell. Sole Agent – When the seller has agreed to sell their property through one estate agent only. Stamp Duty – A government paid tax to be paid by the buyer on a property. Usually expressed as a percentage of the purchase price and will vary depending on the value of the property. Standard Variable Rate – Mortgage lenders standard rate of interest. This can go up or down in line with market rates such as the Bank of England base rate Surveys – Inspection of a property and reports that comments of the structural conditions and more depending of the survey of survey you commission. Studio Flat – A flat which consists of one room that contains the cooking, living and sleeping areas with a separate bathroom or shower room. Tenancy Agreement – A contract between a tenant and landlord. The tenancy agreement will outline the terms and conditions of the rental agreement. Tenure – Conditions on which a property is held, for example leasehold or freehold. Terraced House – A property that forms part of a connected row of houses. Title Deeds – The legal title documents that prove ownership of a property. These are transferred to the new owner on the sale of a property and a copy is held by the mortgage lender. Title Insurance – The insurance policy which a buyer can take out to allow a sale to complete where there is a potential problem with the documentation in proving legal ownership of some part of the land they are buying. Title Search – An investigation carried out by a conveyancer or solicitor into the history of ownership of a property. This search will check for liens, unpaid claims, restrictions and any other problems that may affect ownership. Tracker Mortgage – A mortgage where the interest charged by a lender is linked to a rate such as the Bank Of England base rate.  This means your payments can go up or down. Under Offer – A status of a property that is for sale and the sellers have accepted an offer from a buyer. This is the status given before the exchange of contracts. Valuation – A basic survey of a property which estimates the value of the property for mortgage purposes. Mortgage lenders will need to see this before lending. Variable Base Rate – The basic rate of interest charged on a mortgage. Vendor – The seller of a property. Yield – The income from a property that is calculated as a percentage of its value.