Posted: 16th August 2023

Our Agents - Your Personal Estate Agent - Property Details Glossary.

Our Agents - Your Personal Estate Agent - Property Details Glossary.

When you're searching for a property, you'll notice many different terms used on the property details page.

We thought we would share with you what these different terms mean.

Price:

Knowing the purchase price means you can work out the total cost of buying the property. Not only mortgage payments and deposit, but also any stamp duty, legal and moving costs.

Type of Tenure:

Knowing the tenure of a property means you know how you’d legally own it and if there are any other costs or obligations linked with it.

Freehold:

Freehold means you own the property and the land it’s built on. You’ll usually be responsible for maintenance of the property and have more freedom to extend or change it.

Share of Freehold:

Sometimes the freehold ownership is shared between multiple properties in the same building, such as flats or maisonettes.

This means you’ll usually be responsible for maintenance of the property and have more freedom to alter or change it.

Leasehold:

Leasehold means you buy the right to live in a property for a fixed number of years. A freeholder will own the land the property is built on. And generally, you’ll have to pay ground rent and services charges.

The length of the leasehold is recorded on the lease agreement. If the lease runs out, the ownership goes back to the freeholder. Leases can be extended, but it can be expensive.

The lease will outline what maintenance you and the freeholder are each responsible for. It’s likely you’ll need the freeholder’s permission to alter your home
.
Commonhold:

Commonhold is a type of freehold ownership for a property that’s part of an estate.

So, a flat within a block can be owned as freehold. And the common parts, like stairs and hallways, are owned and managed by a commonhold association, which is owned by the freeholders of the properties.

You’ll be required to join the commonhold association as an owner of a property in the commonhold. And you’ll need to contribute towards the cost of maintaining the estate.

Shared Ownership:

Shared ownership is a form of leasehold where you buy a percentage of the property, and pay rent on the share you don’t own. You may be able to purchase the remaining share at additional cost. When you want to sell the property you might need permission.

Length of Lease:

The length of a lease means how long you’ve bought the right to live in the property for. The leasehold will be for a fixed number of years and will be recorded on the lease agreement.

When the lease runs out, the ownership goes back to the freeholder. Leases can be extended, but it can be expensive.

Ground Rent:

Ground rent is a regular payment made by the leaseholder to the freeholder, or management company.

How much you pay and how often you pay it will be written into the conditions of your lease. If you don’t pay your ground rent, the freeholder could take you to court and ultimately repossess your property.

Ground rent varies from property to property. Some could be a few pounds a year, and others several hundred pounds or more.

Ground Rent Review Period:

Ground rent will have a review period written into the leasehold agreement. This means the amount of ground rent can increase each time it’s reviewed. Costs which appear affordable now may not be in the future.

Peppercorn Rent:

A peppercorn rent is used to describe a very low or token rent paid by a tenant to a landlord. It allows the tenant a right over the land and is likely to be charged on an annual basis. The name comes from leases where historically the rent was a peppercorn or a pound of peppercorns per year.

Annual Service Charge:

Service charges are a regular payment for things like building insurance, caretakers, lighting, heating, cleaning and maintenance for shared areas of an estate.

Service charges are common for leasehold properties, but some newer freehold homes may also include a requirement to contribute towards maintenance of the estate’s communal facilities.

These costs can increase and might be required to cover future maintenance that’s currently unknown. This is called a reserve or sinking fund. Always make sure that you understand the charges.

Sales Listings (auctions):

Guide Price:

An indication of a seller’s minimum expectation at auction and given as a “Guide Price” or a range of “Guide Prices”. This is not necessarily the figure a property will sell for and is subject to change prior to the auction.

Reserve Price:

Each auction property will be subject to a “Reserve Price” below which the property cannot be sold at auction. Normally the “Reserve Price” will be set within the range of “Guide Prices” or no more than 10% above a single “Guide Price”.

Council Tax Band:

Council tax is a payment made to your local authority in order to pay for local services like schools, libraries, and refuse or recycling collections.

The amount of council tax you pay depends on the value of the property you’re living in.

There are some situations where you don’t have to pay council tax. Students, for example, aren’t required to pay, and some rental properties will include council tax within the rent.

Council tax bands for new homes will be estimated if
the council hasn’t confirmed them yet.

EPC Rating:

An Energy Performance Certificate (EPC) provides you with information about a home’s energy efficiency rating. The rating ranges from A (most efficient) to G (least efficient). An EPC must be ordered before a property is put up for sale or rent, and is valid for 10 years.
 
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