First Time Buyer - Glossary

Are you confused by moving jargon? Our extensive first time buyer glossary will take you through every aspect of the buying process.

First Time Buyer - Glossary



The increase in a property’s value. This may be due to a number of factors, from a booming property market to recent home improvements or developments in the proximity of the property.

Arrangement fees

Fees which may apply to signing a particular mortgage deal. These are usually payable up front or simply added to the final loan amount. However adding them to the loan increases your mortgage debt, and so it’s always cheaper over the long term to pay these as a lump sum at the time of purchase.

Base rate

The interest rate set by the Bank of England.

Building insurance

Designed to cover homeowners in the event of re-building property following a fire, flood or structural damage. This does not cover the contents of your house (See Contents insurance).

Building survey

See Surveys.


In the context of a mortgage, capital is the mortgage fee that needs to be repaid – not including interest rates.


A scenario involving several buyers and sellers whose purchases are inter-related. First time buyers are therefore usually the first link in a chain, enabling the owners of the house they wish to purchase to move up to a different property, and so on.


The date your property purchase is completed following the exchange of contracts between buyer and seller. This is typically the day that you’ll move into the property once all legal matters are settled and the monies are transferred.

Contents insurance

An insurance policy that protects possessions within the home – different to buildings insurance which is purchased upon exchange to protect buyers in the event of structural damage to their new home.


The legal process of transferring a property from one owner to another. Your property lawyer will deal with the majority of legal paperwork in relation to your house purchase.


The document detailing the ownership of a property. Legal representatives of both parties will arrange the transfer of these when contracts have been exchanged.


A percentage of the agreed purchase price that must be paid to the seller’s property lawyer upon exchange of contracts.


The decreasing value of a property. This is usually attributed to a collapse in the UK housing market or issues within the local area.


Fees paid by a property lawyer on your behalf in order to carry out necessary checks such as local authority searches and stamp duty. These costs will then be invoiced to you at the end of the moving process.

Energy Performance Certificate

An official document detailing the energy efficiency of a property.


The overall value of the property, minus the mortgage or debt amount. A property owner may encounter negative equity if their home depreciates in value and is worth less than they owe on their mortgage.


The title which confirms you as the owner of the property and the land it sits on. The alternative of a freehold property is a leasehold (See Leasehold).

The Financial Services Authority (FSA)

The UK’s financial ombudsman. For further advice visit the Financial Services Authority website.


A person that agrees to meet mortgage repayments of the borrower if the borrower is unable to meet the repayment deadlines for any reason. A guarantor is usually a parent or guardian and can significantly increase the amount a first time buyer can borrow.


An unfortunate occurrence where a buyer has an offer on a property accepted, but the seller then chooses to sell to someone else who has offered more. Although gazumping is morally frowned upon it is not illegal and can happen at any time.

HomeBuyer Report

Type of survey that is cheaper than a Building Survey. It rates the condition of all permanent structures included in the property, e.g. garages etc, highlights important problems that could affect the property’s value and includes a valuation.

Interest rates

The percentage of the mortgage that is charged to the borrower on top of the mortgage repayments. Interest rates charged by mortgage lenders are usually influenced by the Bank of England base rate.


First time buyers purchasing a leasehold property are only acquiring a lease from the owner for a right to occupy the property, and not the property itself. Typically when the lease expires the property will return to the owner, however it is possible to apply for an extension to a lease.


A special type of loan that enables buyers to pay for their new home. Mortgages make home ownership available to the masses.  Compare 1000s of mortgages, FEE FREE with London & Country, What Mortgage winner 2014.

Negative equity

See equity.


Money repaid to the mortgage lender by the borrower along with any interest owing as part of the agreement.

Shared equity

A scheme enabling buyers to buy an equity share in a property with the aid of a mortgage, while the developer/housing association owns the remaining share. The developer/housing association would be entitled to their share of the equity of the property in the event it is sold at a later date.

Shared ownership

A scheme allowing buyers to purchase a property for as little as a 25 per cent share in a property. The rest of the share is paid over time in the form of subsidised rent.


Applies to first time buyers within shared equity mortgages who ‘top up’ the number of shares they own in their part-owned, part-rented property until they own all shares outright.

Stamp Duty

A Government ‘Land’ Tax (also known as SDLT) paid on top of the purchase price of your new property and its land. The money goes to HMRC and your property lawyer can handle payment on your behalf. This is a payment that must be made at the time of purchase, and cannot form part of your mortgage loan. There are different rates of stamp duty depending on the purchase price of a property.


Property surveys are carried out by surveyors to inspect the property you intend to purchase and ensure there are no major issues with its structure such as damp, subsidence, woodworm etc. AHomeBuyer Report is the cheaper and more accessible version, whilst the Building Survey is a very indepth report for properties older than 100 years or with some dilapidation.


A search undertaken by the mortgage lender to ascertain whether a property is suitable security for their mortgage loan.


The owner of the property available for purchase.


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