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Nicholson Capital: Our Property Development Alphabet

Buying an investment property, can be a complicated business and all the associated jargon doesn’t make it any easier! Check out our alphabetic guide below.

A. Agreement in Principle The mortgage amount that a lender would “in principle” be able to offer a buyer. Decision made based on a credit search and basic personal information

B. Buyer’s Market A term often used when the number of properties on the market outstrips demand, gives buyers leverage to negotiate and keep prices down

C. Capital Gain The profit made from the sale of a property

D. Deposit The sum payable to secure a property, the balance is payable later

E. Equity The value of a mortgaged property after the deduction of charges against it

F. Fixed Rate Mortgage A mortgage in which the interest rate on the mortgage loan is fixed. A low, fixed rate usually available for a fixed amount of time and is used to attract new custom

G. Guaranteed Rental Period A period of 12 months or more that a property developer will guarantee your rental payments regardless of void periods or non-payments

H. Haggling Negotiating the price of a property. Buy-to-Let investors often have the same advantage as first time buyers when negotiating discounts

I. Interest only Mortgage A mortgage in which the borrower only pays interest on the mortgage. The term is usually around 5 – 7 years.

J. Joint Ownership Term used when more then one person owns a property. There are lots of different ways to jointly purchase including joint tenants and tenants in common

K. Key Return An investors main investment and return goal

L. Land Registry Government department that records the owners of land and under what conditions

M. Mortgage Redemption Figure The figure required to repay the outstanding capital and interest of a mortgage

N. Net Return Income from your investment once all expenses from the gross income are deducted

O. Offer Accepted The term used when a vendor accepts an offer made on a property. Key in the formation of a legally binding contract

P. Property Portfolio A collection of property investments owned by an individual, group or company

Q. Quick Turnaround A term used to describe the quick purchase, renovation and subsequent sale of a property for profit

R. Reservation Fee The payment made to secure a property and take it off the market. Often required when investing in a new or off-plan property. This can be non-refundable, but forms part of the purchase price

S. St Helens A town we have spearheaded a large investment scheme into.

T. Title Deeds Legal documents that record ownership of a property

U. Under Offer The term used when a sale is agreed or sold subject to contract but contracts haven’t been exchanged

V. Vendor Legal name to describe the seller of a property

W. Withdrawal Term used when buyer withdraws offer. Usually occurs before searches have taken place to limit money lost

X. Xtra Buying Costs (Yes, we know we are cheating!) Extra buying costs are those outside of the expected. These can come from solicitor and mortgage providers, such as higher lending fees, arrangement fees and valuation fees

Y. Young Professionals Often target market for buy to let investors. Young professionals are perceived to be more likely to rent, have more expandable income and be more reliable then tenants out of work

Z. Zero Stamp Duty No stamp duty payable for properties up to the value of £125,000

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