Glossary

Conveyancing

The process of transferring the legal ownership of property from seller (vendor) to buyer (purchaser).

Contract

The agreement between buyer and seller.

Exchange of contracts

The exchange of one copy of the contract signed by the buyer for another copy signed by the seller.  At this point, the deposit is paid and both parties become legally bound to the transaction.

Completion

This is the date set at exchange for when ownership of the property is to be transferred.  The balance of the purchase money is paid and the keys to the new home are passed to the buyer on completion. This is normally between one to four weeks after exchange of contracts. Registration of title to land is now entered at the Land Registry.  The Land Registry records ownership of the property and all important details relating to rights and liabilities in respect of the property.

Local Search

A search is made at the local council offices in relation to matters such as planning decisions.  Apart from road proposals affecting land within 200 metres of the property, the local authority search will only give information about the property itself.  The search will give no other information about neighbourhood properties. 

Preliminary Enquiries/Property Information Form

A series of questions are addressed to the seller who is expected to answer from his own knowledge. This will include such matters as disputes with neighbours or any planning permission that was required for alterations to the property or extensions that have been built.

Mortgage/Charge

A lender (the mortgagee) takes a mortgage on a property to protect the money that they have loaned against it.  If the borrower (the mortgagor) does not maintain the payments to the loan, then the lender will have the right to take possession and sell the property. 

Joint Tenants

If property is held by joint tenants it cannot be sold without the consent of both. If one dies his/her share of the property passes automatically to the other. 

Tenants in Common 

Each will have a share in the proceeds of sale of the property (not necessarily equal) that can be disposed of as that person decides. Upon death of either tenant in common that person's share in the property can be left by his/her Will to another person or the deceased tenant in common's share in the property will pass by the rules of intestacy. These apply when a person dies without having made a Will.

Stamp Duty Land Tax

Stamp Duty Land Tax is a Government tax on property purchased.  It is payable to the Inland Revenue upon completion of the purchase.  No duty is payable on purchases up to £125,000.00.  Over £125,000.00 duty is payable at 1% of the purchase price and at over £250,000.00 duty is payable at 3%.  For purchases over £500,000.00 the stamp duty land tax rate is 4%.

Land Registry Search

The Land Registry provides guaranteed land registration and gives peace of mind to those buying & selling property.The Land Registry holds the world's largest property database and a search will confirm-:

• the land & estate comprised within the title
• the ownership of the property
• what mortgages and other charges are outstanding on the property
• any rights or restrictive covenants relating to the property

Survey

Your lender will insist on a mortgage valuation report.This confirms to the lender that the value of the property is sufficient to lend the sum you have requested. However,this report is very basic and is not certain to uncover defects in the property.

You should consider a report that will provide far more detailed information on the condition of the property. A building survey or full structural survey is the most comprehensive report.This will highlight any significant defects to the property and will allow you to consider withdrawing from the purchase or negotiating a lower price.

Freehold Property

This is property that is owned outright by you and is not held under a lease.

Leasehold Property

If you purchase a leasehold property that property will be subject to the terms and conditions of a lease.You should ensure that those conditions are clearly explained to you by your solicitor.

You will have to pay annual ground rent and possibly maintenance and will not own the property outright. You will have the right to occupy the property for the term of the lease. When you wish to leave the property you will be able to sell the lease. Provided the period left on the lease is sufficiently long (say over 80 years) then the amount you receive should not be significantly less than if the property was freehold.  

Please contact us for further information.