This glossary describes key buyer terminology.
28 Day Exchange Deadline
The developer requires a fixed period, usually 28 days, between reservation and the exchange of contracts. It is up to the developer whether they strictly adhere to this deadline or whether they extend it.
Agreement in Principle
An agreement in principle is a document from a mortgage lender that indicates how much money a buyer can borrow. It details to the buyer how much ‘in principle’ they would lend to the prospective borrower based on some basic information.
Authority to Exchange/Conclude Missives
Once the buyer's conveyancer has checked the mortgage offer to ensure that the purchase price and available Help to Buy funds are consistent with the Authority to Proceed, they will need to request permission to exchange contracts from the Help to Buy agent. If approval is given then the Help to Buy agent will send an Authority to Exchange (ATE) to the buyer's conveyancer, typically this happens within three working days of the request being submitted.
Authority to Proceed
This term is only applicable if you are applying for a Help to Buy Equity Loan. Once the Property Information Form has been reviewed by your Help to Buy agent, you will receive an Authority to Proceed (ATP) to confirm you are eligible for the scheme and that you can proceed further.
All developments have to comply with stringent building standards and are offered with the benefit of structural defects insurance (sometimes referred to as a warranty). Most major developers subscribe to the National House Building Council (NHBC) scheme which offers a 10-year “Buildmark” warranty. Other developers may subscribe to similar schemes such as the Premier Guarantee Scheme or LABC warranty. Building warranty is designed to cover defects in the property which may arise during the warranty period as a result of the developer's failure to observe the scheme requirements.
A chain describes a line of people who need to both sell and buy a property. For example, say you are buying a property from someone and they are moving into a new home that they are purchasing from another person as well, that is an upward property chain. This means that your completion date (when you move in) is likely to be affected by the date your seller can move into their next home too. If you are purchasing a new build home from a developer/housebuilder, they will have no upward chain, however resale properties may be in a chain depending on the circumstances.
Client Care Letter
A client care letter sets out the terms of the agreement between you and your chosen conveyancer. The letter normally includes information such as the conveyancer's contact details, their fees, and a breakdown of how they will assist you through the purchase process.
Completion on Notice/Notice to Complete
For new build properties, completion on Notice normally means as a buyer, once the building has been physically completed, you’ll have just 10 days to complete yourself, get your keys and move in, most importantly after paying the balance of your purchase and legal fees. Notice to complete cannot be given unless a building regulations completion certificate or a new homes warranty and insurance certificate, such as an NHBC, have also been issued.
The Consumer Code for Home Builders was developed by the home-building industry to make the property purchase process fairer and more transparent for buyers.
When you purchase a house, the seller's conveyancer will send a draft contract to your conveyancer for review. This is a document that states the terms you'll agree to and how much you will pay for the property. Your conveyancer will liaise with you regarding the contract, negotiating any changes if required, until you and the seller are happy with a final version.
A conveyancer helps transfer the legal ownership of a property from one person to another. Both the housebuilder/seller and buyer need a conveyancer, as both will talk with each other in order to complete the purchase process.
Defect Liability Period
Following practical completion, the builder/contractor will remain liable for any defects for a set period of time.
A development is a group of individual properties, either apartments or houses, that are sold by a developer/housebuilder.
Disclosure of Incentives Form
A Disclosure of Incentives Form is a document filled out by the housebuilder/seller for new build properties. The purpose of the form is to make sure that all of the financial and non-financial incentives offered to buyers are also clear to the mortgage lenders. This is very important as it may affect the value of the property.
Energy Performance Certificate (EPC)
An Energy Performance Certificate (EPC) provides information on energy use, energy performance, carbon dioxide emissions and fuel bills.
An estate agent is a person or company that is responsible for the sale of properties on behalf of housebuilders/developers.
Once your completion date has been confirmed, you'll receive a financial statement from your conveyancer. This is a document stating the total sum due on completion and a brief explanation as to how it was calculated.
With a freehold property, the buyer has complete and absolute ownership of the land and all buildings on it.
Gifted Deposit Declaration Form
If you have received gifted monies as part of your deposit then a gifted deposit form will need to be signed so your conveyancer can prove how this fund was received. We'll automatically send an email to the gifters to sign this digitally through our platform (no sign up required). If a gifter has given more than £10,000, we'll also need to conduct an identity check using our partner Onfido.
(England and Wales only) Ground rent is the annual fee that a leaseholder pays to the freeholder.
Help To Buy: Equity Loan
With a 'Help to Buy: Equity Loan', the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home. In London, you may be able to get a Government equity loan for up to 40% of the purchase price.
A property developer or housebuilder is a person or a company that builds properties to sell.
Independent Financial Advisor (IFA)
An 'Independent Financial Advisor (IFA)' is someone that can provide professional and unbiased advice across a whole range of financial products and different companies. A restricted adviser on the other hand can only recommend certain products or product providers.
Land Registry is the Government department that records who owns what land, and under what conditions.
On the completion date, the buyer's conveyancer will send the purchase money to the seller and the developer/housebuilder will release the keys.
Leasehold means that the buyer has a lease from the landlord (sometimes called the freeholder) to use the property for a number of years. The lease is a legal agreement with the landlord and details how many years the buyer will own that property for. This differs from Freehold which you can learn more about here.
The long stop date is the date by which the building must be completed.
Memorandum of Sale/Sales Letters
The 'Memorandum of Sale/Sales Letters' is a document that records the fact that both the buyer and seller have agreed to the transaction. It can also be called a Notification of Sale. It usually records the details of the price being paid, the details of the seller and buyer and their respective lawyers. If there are any conditions to the sale (for example, exchange by a certain date) then this will form part of the Memorandum of Sale. Please be aware that this is not a legally binding document.
A mortgage is a loan that you can use to buy a property with. Once you have your deposit, the rest of the fee can be paid by using a loan from a bank or building society. The mortgage will set out the terms of how you will repay the loan, for example, the period of time over which you’ll pay the money back, and the rate of interest a lender will charge you for the loan.
A mortgage broker is a person or company that specialises in finding lenders to provide you with a mortgage. They'll work with you to find an appropriate deal that matches your circumstances, for example, the size of your deposit and your monthly repayment preferences will affect what you are offered.
A mortgage offer is a formal document that confirms a lender is happy to loan a buyer the money required to purchase a property. It will detail in the document the exact figure the lender is willing to advance to the buyer.
Mortgage Redemption Figure
A mortgage redemption figure is an amount required to repay the outstanding capital/interest of a mortgage.
When a buyer applies for a mortgage, the lender will arrange for a surveyor to visit the property to make sure they're happy to loan the money for it.
Off-plan is when a buyer is purchasing a new build property that has yet to be built.
An ombudsman is an independent professional body that investigates complaints on behalf of customers against estate agents, solicitors and insurance companies.
Before you are able to complete the purchase of the property, your conveyancer will carry out 'pre-completion checks'. Their purpose is to check that the previous search results remain up to date. If you have a mortgage then your conveyancer will also perform a bankruptcy check for your lender.
Predicted Energy Assessment (PEA)
Predicted energy assessments are for new build homes. Normally, when a home is designed, a “target energy rating” based on the design is produced to show a building inspector that the property will meet requirements under Part L of the Building Regulations. The final energy performance of the property must achieve at least this target energy rating to receive its final sign-off from the building inspector.
Proof Funds Declaration Form
As part of the reservation, you'll be asked to detail your proof of funds, this could be a mortgage, savings, or a gift from relatives or friends to name a few. Your conveyancer will need proof of how you have acquired these funds for the purchase. As part of this, you'll also be asked to sign a declaration form. This form affirms that you accept the details you provided are true.
A property deposit is a lump sum that a buyer uses to own a percentage of property outright. For example, a buyer may pay 10% of the value of the property upfront and then borrow the remaining 90% through a mortgage lender.
Property Information Form
A Property Information Form is required when you are using a Help to Buy Equity Loan to purchase your property. This form provides the Help to Buy agent with all the information relating to the property you wish to purchase using the Help to Buy scheme. With Yourkeys, this form can either be completed by yourself, your reservation guide or if you already have a completed one, this can be uploaded directly to the platform.
A repayment mortgage includes part interest and part capital repayment. So long as you meet all of the payments required by the lender on time, your mortgage will gradually reduce until it is repaid in full.
A reservation agreement is a signed document that you and the seller sign to confirm you are happy to reserve the property. This confirms details such as the reservation fee, the property details and the agreed purchase price. With Yourkeys you can either sign this online or a physical copy of the signed agreement can be uploaded to our platform.
A reservation fee is a payment made to secure the property you are purchasing and at this point the property is taken off the market.
Searches are enquiries made to various authorities that hold information about the property you plan to purchase. Their purpose is to find out everything about your property including the land it sits on and the area around it. The main searches include local authority searches, environmental searches and drainage and water searches.
This is a charge that is made towards the upkeep of a freehold or leasehold property. Prior to completion, the service charge for a home will usually be estimated on a GBP per square foot basis. Following completion Service Charge is collected from freeholders or leaseholders by an appointed managing agent.
Shared ownership is a system where buyers can purchase a proportion of a property and then pay rent on the remaining share.
The short stop date will be relayed as an estimated date, this is when the developer expects to have finished the building.
Snagging entails the developer identifying and making good minor issues, such as touching up paintwork and adjusting appliances, prior to the buyer moving in.
Stamp Duty Land Tax (SDLT) is a government tax that is charged to a buyer when they buy a property. If you're a first-time buyer, then you won't pay stamp duty on properties worth up to £500,000 but you will pay 5% on the next £425,000 (the portion from £500,001 to £925,000).
Subject to Contract (STC)
Subject to Contract or STC for short, indicates that an agreement is not legally binding yet.
A survey is a detailed visual inspection of a property's condition. Surveys are not mandatory and buyers can choose whether or not to have a survey on the property they are purchasing. If a buyer does decide to have one, they'll need to hire a surveyor to carry out these checks.
When you are reserving a property certain skipped steps causes the reservation to be marked as 'tentative. This means the buyer or the seller still needs to complete some details before the reservation is fully complete.
Time-based One-Time Password (TOTP) application
A time-based one-time password or TOTP application is one that allows you to provide secondary validation to your account. This means as well as your written password, we can also ask for you to scan a QR code from your mobile device, for example, to add extra security when logging in.
The title deeds are the legal documents that prove ownership of land/buildings and the terms on which they are owned. A requisition on title is an enquiry relating to the completion of agreements and the 'Transfer of Title' is the document that passes the ownership from the seller to the buyer.
Transaction Information Form
A Transaction Information Form provides vital details to your conveyancer that allow them to have an overview of the transaction and the property.
Vendor is the legal name sometimes used to describe the seller of the property.