Sellers – here’s some property jargon you need to know


The UK property market has bounced back after seven weeks of inactivity during March and April, with buyers flocking to the market in search of their next home.

As a seller, it’s time to take advantage of this surge in demand and sell quickly post-lockdown. But are you clued up on the most-used property jargon?

Below, we present an A-Z jargon buster to keep you abreast of some of the peskiest property phrases.


Agreement in principle

Also known as a mortgage in principle, this is a document from a mortgage lender that confirms they are willing to lend to you.

It’s based on information such as financial history and credit checks. Having a mortgage in principle should help prove to a seller that you’re a serious buyer.



The crucial process of legally transferring ownership of a property from seller to buyer. Both parties will need to instruct a solicitor/conveyancer to carry out the process.

This can include anything between advising buyers and sellers of their rights, researching legal ownership of properties and liaising with mortgage lenders and estate agents.


Early repayment charge

Often abbreviated to ERC, this is a financial penalty the lender will charge if the buyer opts to repay their mortgage deal early – for example, in three of a five-year fix.

A borrower paying back some or all of their loan sooner than expected costs the lender, so they set ERCs to compensate themselves.



Introduced in 2007, an Energy Performance Certificate gives homes an energy efficiency rating from A- to G-, with A- being the most efficient and G- the least efficient.

The EPC highlights a property’s energy use and gives an indication of how much fuel bills might cost. They are valid for 10 years.



This is when copies of signed contracts are exchanged between the buyer and seller, and the transaction becomes legally binding.

At this point, both parties are unable to pull out, but they face financial penalties if they do.



If you own the freehold property, then you own the building and the land that it stands on outright indefinitely.

Freeholders must maintain their own property and land, but don’t face costs such as service charges or ground rents.



This is when a seller accepts a higher offer from a third party prior to a legal exchange of contract with another buyer.

The prospect of gazumping is a major worry for buyers when it comes to purchasing a home, and calls have been made to ban this largely unpopular practice.



The opposite to gazumping, where a buyer lowers their offer just before the exchange of contracts. This will force the seller to sell for a lower asking price by backing them into a corner.

However, it’s legally acceptable until exchange of contracts has taken place.



HMOs, or Houses in Multiple Occupation, are properties housing at least three tenants from more than one household, sharing toilet, bathroom or kitchen facilities.

A home that has five tenants – forming more than one house – sharing facilities and is at least three stories high is known as a large HMO. Most student housing and shared homes count as HMOs.



Owners of a leasehold own their home and the land it sits on for the length of a lease agreement with a freeholder. Extra costs, such as ground rents, service charges, and maintenance fees, are required.

Nearly all flats and apartments are leasehold. Some houses – including all shared ownership ones – are too.



This much-used acronym stands for Loan to Value, which outlines the ratio of mortgage you have in relation to your property’s worth.

To put this into context, if a property is worth £400,000 and you take out a mortgage of £200,000, then the LTV is 50%.


Negative equity

This is when the value of your home falls below the outstanding mortgage. A sharp drop in house prices – such as after the 2008 global financial crisis – can cause this.

In essence, a property is worth less than the mortgage owed on it.


Stamp duty

Sometimes known as SDLT, this is a tax paid on homes worth more than £125,000. What you pay depends on the price and type of property.

First-time buyers of homes worth less than £300,000 are exempt from paying stamp duty. Relief was also extended to shared ownership homeowners. Of course, there is now a stamp duty holiday in place until March 31 2021 as a result of the Covid-19 pandemic.


Hopefully this list has decoded some troublesome jargon and you are confident to put your home on the market without the use of a dictionary.

Here at TLC Properties, we have the tools and knowledge to help you to sell or buy your home efficiently and safely. For more information on our services, please get in touch with us today.

Additionally, you can request a free and instant online valuation on our website to see how much your home could be worth on the current market.

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