1. Home
  2. First Time Buyers
  3. Advice
  4. First Time Buyer Glossary

Table of contents

    First Time Buyer Glossary

    By The reallymoving Team Updated 11th Jul, 2024

    Reviewed by Emily Smith

    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

    Estate agents, conveyancers, lenders, and surveyors all have their unique brands of home-buying jargon that can be confusing to a First Time Buyer. Our informative glossary of common terms will help make dealing with property professionals much more straightforward.

    Agreement in Principle

    A mortgage agreement in principle is a statement from a bank or building society that tells you how much money they could be prepared to lend you. They are not legally binding but can be an indicator of how much you might be able to borrow and can help you secure a mortgage.

    Appreciation

    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 local neighbourhood.  

    Arrangement fees

    Fees which may apply to signing up for a particular mortgage deal. These are usually payable up front, or in some cases can be added to the final loan amount. Be aware that adding them to the loan increases your mortgage debt and the amount of interest you’ll pay, so it’s always cheaper over the long term to pay these as up front.

    Base rate

    The interest rate set by the Bank of England.  

    Building insurance

    Building insurance is designed to cover homeowners in the event of damage to the property following events such as a fire, flood or structural damage. This does not cover the contents of your house (See 'Contents insurance' further down).  

    Building Survey (Level 3 Survey)

    The most comprehensive level of home survey offered by RICS-accredited chartered surveyors. It is especially suited to older buildings or more run-down properties. You can read more about Building Surveys in our guide.  

    Capital

    In the context of a mortgage, capital is the mortgage debt that needs to be repaid by the end of the agreed term – not including interest payments. With a repayment mortgage the capital will reduce over the mortgage term; the capital on an interest-only mortgage does not reduce unless you make additional part repayments.

    Capital gains tax

    Capital gains tax is the tax you pay on the profit you receive when you sell an asset that has increased in value.

    Chain

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

    Completion

    Completion is 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. Read more about what happens on completion day.

    Condition Report (Level 1 Survey)

    The most basic type of home survey offered by RICS-accredited chartered surveyors. It is recommended for newer and conventionally built properties that appear to be in good condition.

    Contents insurance

    Contents insurance is a policy that protects possessions within the home – different to buildings insurance which is designed to protect buyers in the event of structural damage to their home.

    Conveyancing

    The legal process of transferring a property from one owner to another. Your property lawyer – a conveyancing solicitor or licensed conveyancer – will deal with the majority of the legal paperwork and administration in relation to your house purchase. Read more about conveyancing for First Time Buyers.

    Deeds

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

    Deposit

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

    Depreciation

    The decrease in the value of a property. This is usually attributed to either a downturn in the broader UK housing market or issues within the local area.  

    Disbursements

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

    Energy Performance Certificate (EPC)

    An official document detailing the energy efficiency of a property. You can read more about them in our guide to EPCs.

    Equity

    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 ends up worth less than the amount they owe on their mortgage.  

    Financial Ombudsman Service

    The UK’s financial ombudsman; this is an impartial body that adjudicates on complaints and disputes between customers and financial services providers, including mortgage lenders.

    Freehold

    The title which confirms you as the owner of both the property and the land it sits on. The alternative to a freehold property is a leasehold (See 'Leasehold' further down this page).  

    Gazumping

    Where a buyer has an offer on a property accepted, but the seller then chooses to sell to someone else, usually someone who has made a higher offer. Although gazumping is frowned upon it is not illegal and can happen at any time prior to the exchange of contracts.

    Gazundering

    Gazundering is when a buyer reduces their offer in the final stages of a property transaction just before the exchange of contracts.

    Guarantor

    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. 

    Help to Buy

    The Help to Buy schemes are a range of government schemes aimed at supporting affordable home ownership, particularly for First Time Buyers.

    HomeBuyer Report (Level 2 Survey)

    The most popular type of RICS home survey, more detailed than a Condition Report (Level 1) but not as detailed as a Building Survey (Level 3). In a HomeBuyer Report, the surveyor rates the condition of all permanent structures included in the property and highlights important problems or defects that could affect the property’s value.

    Interest

    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.

    Land Registry

    The Land Registry is a database that registers ownership of land and property in England and Wales.

    Leasehold

    First Time Buyers purchasing a leasehold property are legally 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.  

    Licensed conveyancer

    A licensed conveyancer is someone who is qualified to process the legal aspect of property transactions. Conveyancers do not necessarily have to be qualified as a solicitor to handle your conveyancing; however, they must be regulated by the Council for Licensed Conveyancing (CLC). The CLC is a regulatory body that oversees the licensed conveyancing industry.  

    Loan to Value (LTV)

    The Loan to Value ratio is the amount of money that you take out against the value of the property.

    Mortgage

    A special type of loan that enables buyers to pay for their new home over an agreed term.

    Off-plan

    Refers to buying a new-build property before it is actually constructed, with only the plans available for inspection.

    Remortgaging

    Remortgaging is the process of moving to a new mortgage while staying in the same property.

    Repayments

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

    Repossession

    If a homeowner defaults on the repayments of their mortgage or any other loans secured against their property, their home could be taken back by the lender. This means that the lender will ask you to vacate the property and then the property is sold, usually at auction and often for less than the full market value. 

    RICS

    The Royal Institution of Chartered Surveyors is the accrediting body for professional home surveyors in the UK, responsible for setting and maintaining professional standards in the industry.

    Right to Buy

    Right to Buy is a scheme that offers council tenants the legal right to purchase the property they are living in at a discounted price if they have had a public sector landlord for 3 years or more.

    Shared Ownership

    Shared Ownership is a government scheme to help people on the property ladder. You can apply to buy a portion of your property, and then you pay rent on the remaining portion. This scheme also allows you to increase the share of the property you own, known as staircasing.

    Solicitor

    The solicitor you use to buy a property is a conveyancing solicitor. All solicitors must be regulated by the Solicitors Regulation Authority (SRA), which regulates and has an independent ombudsman scheme to handle any disputes. Before you choose a conveyancing solicitor, always make sure that they are listed on the SRA website.

    Stamp Duty

    Properly known as Stamp Duty Land Tax (SDLT), this is a transaction tax paid on the purchase price of your new property and its land. The money goes to HM Revenue & Customs and your conveyancer will submit the payment and the associated tax return on your behalf. Stamp Duty must be paid at the time of purchase, and cannot form part of your mortgage loan. There amount of Stamp Duty payable depends on the purchase price of the property.

    First Time Buyers are exempt from paying Stamp Duty if the property they're purchasing is under £425,000, and they will pay a reduced rate if the property is priced between £425,000 and £625,000. You can use or Stamp Duty calculator to work out how much you'll need to pay.

    Surveys

    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. The three levels of report offered by RICS surveyors are the Condition Report (Level 1 Survey), HomeBuyer Report (Level 2 Survey) and Building Survey (Level 3 Survey).

    Valuation

    An assessment of the market value of a property. There are several different kinds, such as a mortgage valuation (a report requested by the mortgage lender to ascertain whether a property is suitable security for their mortgage loan).  

    Vendor

    The owner of the property available for purchase

    Related articles

    Ready to get quotes?

    Compare conveyancing fees from up to 4 solicitors

    Get conveyancing quotes

    We've already helped over 2,882,911 movers

    12,986 user reviews

    Knowledgeable and responsive, I would use again.

    Travis on 04/04/2024

    As featured in