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Glossary of Property Terms

The property market comes with a language of its own. Decoding jargon can be a monumental task, especially for novice investors. Here are some of the most common terms explained:

Build to Rent Developments: Usually apartment blocks designed for renters. They include communal amenities and services, such as: launderettes, gyms, cinema rooms, and concierges. Often subject to longer tenancies.

Buy to Let: Buying a property with the aim of renting it out to tenants.

Buy to Let Mortgage: A loan taken out to buy or refinance a property to be let out to tenants.

Capital: Represents the amount of money you have put into a property.

Capital Gains Tax: A tax you pay on the profit of a property or other asset.

Capital Growth: The profit earned if you sell a property at a higher price than you paid.

Cash Flow Positive: This is when you receive rent that is of a higher value than your mortgage repayments.

Co-living Accommodation: A shared apartment, equipped with en-suite bedrooms, and communal kitchen and living areas.

Depreciation: The decrease in value of a property over time.

Due Diligence: The care you should take before entering into an agreement or financial transaction with another party. Generally, an investigation to confirm all the facts.

Exit: The process of an asset being sold, generally at a profit.

Freehold Purchase: A buyer owns the property and the land it’s built on.

GDV: Gross Development Value. The estimated value amount a property or new development would fetch on the open market, if it were sold in the current economic climate.

Granny flat: A self-contained living area for one or two people, usually on the grounds of a family home. It can be attached to or detached from the main property.

Greenbelt: An area of open land around a large urban district, on which building is restricted.

Ground Rent: The charge imposed by the freeholder on the leaseholder of a property.

Housing Crisis: The shortage of housing in the UK, with demand outpacing supply.

Land Registry: Government office which holds records of land ownership, and any charges against the property. A fee is paid to the Land Registry when a property changes owner.

Leasehold Purchase: A buyer is essentially buying the right to occupy a property for a set term.

Listed Building: A building of special architectural or historic interest regarded to be of national importance, and worth protecting. There may be restrictions over its use, maintenance, and repair.

Microapartments: A purposely built one-room living space. Residents of microflat blocks have access to communal kitchens, showers, and roof gardens.

PRS: Simply, the private rental sector.

Rental Yield: The measure of how much cash a property (or other asset) produces annually, as a percentage of its value.

Stamp Duty: A tax paid when purchasing a property worth over £125000. It is necessary to obtain a Certificate of Land Ownership from HMRC.

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