Learner Landlord - Basics

Landlord Speak – Jargon & Terms

 

Accelerated Possession Procedure (APP)

APP is the process used by landlords to gain possession of their property without a court hearing. The decision is made by the court based on documents and information supplied by the landlord and the tenant if applicable. In order to qualify for the APP there has to be a written tenancy agreement in place, and the obligatory 2 months’ notice has to have expired. See ‘Court Service’ for more information.

 

Accreditation

Landlords who are accredited voluntarily agree to meet minimum standards with regards to property maintenance and conduct. See ‘Landlord Accreditation’ for more details.

 

Annual Percentage Rate (APR)

A simple way to evaluate the annual cost of a mortgage or other loan e.g. 3% APR means you pay £3 for every £100 borrowed annually. APR can include mortgage insurance cost and processing fees in addition to the interest cost of the loan. By law, the APR of a loan has to be disclosed prior to agreement.

 

Arrangement Fee

The amount charged by some mortgage lenders and most mortgage brokers/financial advisors for access to privileged mortgage deals e.g. discounted mortgage rates. Arrangement fees are normally calculated as a percentage of the mortgage amount and can be paid in advance or added to the amount borrowed.

 

Association of Residential Letting Agents (ARLA)

ARLA is the only professional, self-regulating body for letting agents/agencies in the UK. Members of ARLA voluntarily abide by strict codes of conduct and practice, and should they break them then their clients can use ARLA to take disciplinary action and make monetary claims.

 

Assured Tenancy

A residential tenancy agreement that allows a tenant to remain in residence until he/she chooses otherwise or until the landlord seeks a possession order. Tenants cannot be evicted by the landlord without good reason. Assured tenancies were introduced as part of the 1988 Housing Act.

 

Assured Shorthold Tenancy

A form of tenancy, with limited security of tenure, that generally takes the place of an assured tenancy agreement at the end of the fixed term. This type of tenancy agreement allows the landlord to give notice at any time (minimum of 2 month’s notice but not within the first 6 months of the tenancy) using Section 21 of the 1988 Housing Act. Any tenancy entered into on or after March 1st 1997 is automatically registered as an assured shorthold tenancy.

 

Bank Base Rate

The interest rate that the Bank of England charges UK banks for secured overnight lending. This rate is set by the Bank of England’s Monetary Policy Committee once per month and is used as the benchmark for the interest rates charged by the banks themselves on things like loans, mortgages and credit cards. When the bank base rate changes so do the interest rates charged by the individual banking groups. Before 1997 the term ‘Repo Rate’ was the given title for what is now the bank base rate.

 

Bank of England’s Monetary Policy Committee

The committee that sits once per month to decide the UK’s ‘Bank Base Rate’ – the benchmark used by the UK banks to set their personal loan and mortgage interest rates. The committee comprises 9 of the UK’s top economists, including the Governor of the Bank of England, the Bank’s Chief Economist and several external members. In exceptional circumstances the UK Government has the power to control the Bank Base Rate for a limited period of time.

 

Buy to Let

The act of purchasing a residential property with the aim of letting it to a tenant.

 

Capped (Mortgage Rates)

Mortgages with capped rates benefit from a pre-set maximum interest rate. This means that if interest rates in general rise, those of a capped mortgage will only rise as far as the cap. Should interest rates fall however then those of a capped mortgage will fall as well.

 

Commonhold

A form of tenure which allows the leaseholder’s association within a property to jointly hold the freehold of the property. This type of tenure was created by the Commonhold and Leasehold Reform Act 2002.

 

Completion

The act of exchanging contracts when buying/selling a property. On completion the terms of the buyer’s mortgage commence and the money owing is transferred into the bank account of the seller.

 

Conveyancing

An umbrella term used for the legalities of buying and selling property.

 

CORGI

The Confederation of Registered Gas Installers. See ‘Gas Safe’ for further details.

 

County Court Judgment (CCJ)

The decision by a County Court for a debtor to pay an outstanding debt over a period of time and at a rate they can afford. CCJs are recorded on the debtors credit file and are visible to any creditor performing a credit check.

 

Court Service

A helpful website, accessible to the public, that offers help to landlords seeking possession of their property via a possession order. The site provides downloadable forms, including the N5 form for possession claims and the N5B form for the ‘Accelerated Possession Procedure’ and also useful information on a wide range of buy to let subjects.

 

Credit Reference Agency

A CRA is a specialised company that has access to and provides credit information about individuals e.g. prospective tenants. Anyone applying to a CRA for details of an individual will receive a complete credit history, including any CCJs and bankruptcies.

 

Deposit Protection Scheme

A relatively new scheme that protects a tenant’s deposit in a regulated tenancy deposit scheme. See ‘Tenancy Deposit Protection’ for more details.

 

Discounted Mortgage Rate

Special mortgage rates that are set below the normal variable rate for a fixed period of time. Mortgage lenders are known to offer discounted mortgage rates to first time buyers as an incentive, many of which last for between 2 and 5 years. The downside of this type of mortgage is that they normally carry early redemption penalties.

 

Discretionary Grounds for Possession

In simple terms a set of nine reasons that a court will consider as grounds for granting a landlord possession of their property.

The grounds for possession are as follows:

• Suitable accommodation on the same basis has been offered and refused by the tenant

• The rent is in arrears but not by more than eight weeks • Rent arrears are persistent and continuing • The terms of the tenancy agreement have been breached by the tenant

• The property has been neglected or damaged, or sub-let to another individual

• The tenant has received nuisance complaints from neighbours or other residents

• Furniture on the tenancy inventory has been damaged or sold

• The property was linked to employment and the employment came to an end

• The tenant purposely gave false information to secure the tenancy of the property Domestic Energy Assessors (DEA) Any registered assessor that is qualified to provide landlords or home owners with Energy Performance Certificates.

 

Easement

The right to use the real property of another individual without having to own it in any way. Easement most commonly refers to ‘right of way’ where one property owner has need to travel over the property of another to reach their land.

 

Energy Performance Certificate (EPC)

A legal certificate prepared by a ‘Domestic Energy Assessor’ which assesses the domestic energy consumption of a residential property. The certificate also includes a list of recommendations for lowering the energy usage of the property. All properties are given a rating, A to G, with the better properties being A to C. When selling a residential property the EPC has to be less than 12 months old, while rental properties have to have a viewable EPC that is less than 10 years old.

 

Exchange of Contracts

The point within the property buying/selling process where the legal contracts are officially signed and exchanged by the buyer and the seller. Once signed and witnessed the sale of the property is deemed legal and binding and the title deeds are handed over. Also see ‘Completion’.

 

Eviction

Eviction is the process by which a tenant is ordered to leave a residential property by the landlord, via the county court. Eviction is illegal without a court-granted possession order, and as such one of the nine ‘Grounds for Possession’ has to be present. Tenants are protected from harassment, bullying and other unfair treatment by the Protection from Eviction Act 1977.

 

Fair Rent

The amount of rent determined to be fair by the Rent Service based on the current local market conditions. Most Fair Rent calculations are capped and can only be exceeded where landlords can prove they have made significant improvements to a property.

 

Fixed Interest Rate Mortgage

A type of mortgage product that benefits from an interest rate that remains static regardless of what the Bank of England’s base rate is doing. This type of mortgage often carries large penalties if the borrower decides on early redemption.

 

Fly to Let

The purchase of a residential property oversees, bought with the intention of letting long-term or for a large portion of each year.

 

Freehold

Freehold is a common type of tenure that grants the ownership of a property to an individual for an indefinite period of time. The alternative is leasehold which grants ownership for a fixed period of time i.e. the length of the lease. Commonhold is a newer type of tenure that combines elements of freehold and leasehold.

 

Fixtures

Integral parts of a property that are included in either a sale or a let. Common types of fixtures include light fittings, wall-mounted radiators, dimmer light switches and alarm systems.

 

Flexible (Mortgages)

Special types of mortgages that allow the borrower to take short payment breaks, pay large sums off the remaining mortgage balance without penalty, and take advantage of discount interest rates on occasion.

 

Financial Services Authority (FSA)

The FSA is the governing body responsible for the approval of private homebuyer mortgages and the brokers that arrange them. They are not however responsible for business mortgages or buy to let mortgages.

 

Gas Safe

Gas Safe is the new association for accredited gas installers, taking over from CORGI in 2009. Today all gas engineers and installers that intend to work in the public domain have to be registered with Gas Safe, as opposed to CORGI. Gas Safe is also the regulatory body for complaints pertaining to gas safety issues reported by the public. All landlords are required by the Gas Safety Regulations 1998 to have all gas appliances (including gas fires, boilers and cookers) and external flues safety checked every 12 months by a Gas Safe registered engineer.

 

Good Repair

A measure of the living conditions deemed acceptable by members of the environmental health authority. Landlords are required by law to keep rental properties in a good state of repair and habitable. If they fail to do so and a tenant’s health becomes affected the tenant has the option to claim compensation from the landlord.

 

Grounds for Possession

In total there are 17 Grounds for Possession that can be presented to a county court along with a possession order. Of the 17 grounds, 8 are considered to be mandatory and providing the landlord has complied with the terms of the tenancy agreement and served the necessary notice to the tenant the court has no option but to grant the landlord possession.

The remaining 9 grounds for possession are termed Discretionary and in these cases the courts can sometimes find in favour of the tenant. Landlords can also file a possession order if they believe that the tenant is no longer using the rental property in question as their primary residence, as is stipulated in most tenancy agreements.

 

Harassment

Harassment in this case refers to the continual interruption of a tenant’s life by either a landlord or a landlord’s agent, either by phone, personal visits or even text messaging. Under the Protection from Eviction Act 1977 harassment is a criminal offense, as is the withholding or withdrawing of services deemed necessary for everyday living e.g. water, electricity gas etc.

 

HMO Licensing

 As of April 2006 it became a local authority requirement for all Houses of Multiple Occupation (HMO) to become licensed as such. Any property without the correct license and let as a multiple occupancy property is now subject to fines of up to £20,000. Properties that class as HMO properties need to meet the following criteria among others:

• Three or more storeys including attics and basements is they are used as living accommodation

• 5 or more occupants that make up 2 or more households (five members of one family don’t count)

• All households share kitchen and bathroom facilities.

All landlords need to consult the licensing requirements of their local authority before letting out a HMO, as some local authorities have imposed additional licensing procedures for some types of multiple occupancy properties. More information can be found on the website of the Office of the Deputy Prime Minister.

HMOs in Scotland have different qualifying criteria and as such Scottish landlords should visit the website of the Scottish Executive and download the HMO Guidelines for Landlords.

All applications for a HMO license have to be made by the property owner, even if the property is due to be let through a third party or a letting agent.

 

Home Condition Report

A non-biased report compiled by a registered and licensed home inspector following a detailed inspection of a property. The aim of the report is to highlight areas of the property that require attention, while also giving an overall summary of the condition of the property. Although not required by law, a home condition report is often included in a Home Information Pack.

 

House of Multiple Occupancy (HMO)

See ‘HMO Licensing’ for information on the criteria for HMOs or alternatively visit the website of the Office of the Deputy Prime Minister for in-depth details.

 

Housing Benefit

A local authority benefit aimed at helping those claiming state benefits and those on low incomes to pay their rent. The amount claimable by a family or individual depends on their income and the rent of the property. Payments are made by local councils directly to the landlord of the property and a month in arrears. Some local authorities have phased out housing benefit and replaced it with a newer benefit known as local housing allowance.

 

Housing Health and Safety Rating System

As of April 2006 all residential property being sold or let has to be assessed according to the Housing Health and Safety Rating System. All structures, access paths, outbuildings, gardens and other outdoor spaces are assessed for potential hazards and the potential to cause harm. Each property is assessed according to 29 areas of potential risk. Should any of these areas be deemed hazardous then the severity of the hazard is further assessed, and the area is given a score of one to four depending on the potential it has to cause a person harm – a score of one being the most severe. The report is designed to help home owners and landlords to rectify health and safety issues that could adversely affect the sale or let of the property. Detailed information can be found on the website of the Office of the Deputy Prime Minister.

 

Housing Ombudsman Service

The Housing Ombudsman Service is in simple terms the place to complain for tenants living in socially rented accommodation (Housing Trusts and Associations). All social landlords in the UK are part of the database, as are some private landlords and tenancy management agencies. Any complaints directed to the Housing Ombudsman Service are thoroughly looked into before any dispute resolution takes place. Tenants living in accommodation provided by their local authority need to address complaints to the Local Government Ombudsman and not the Housing Ombudsman Service.

 

Interest Only (Mortgage)

A type of mortgage in which the borrower pays off the interest on the mortgage loan each month but none of the capital. The capital is paid separately in the form of an endowment – the value of which should cover the amount originally borrowed by the time the mortgage terms end.

 

Landlord Accreditation

Schemes set up by local authorities, some universities and several landlord associations provide private landlords with the opportunity to voluntarily become accredited. By being accredited a landlord agrees to adhere to a set of standards compiled by the accrediting body, and as such can be trusted to be a decent landlord.

 

Landlord Energy Saving Allowance

This is a landlord specific tax allowance that can be used to improve the energy efficiency of a rental property. Among other things the allowance can be used for loft insulation, cavity and solid wall insulation, central heating improvements and boiler replacement.

 

Landlord Licensing

Any landlord who intends to let a HMO in the UK (See HMO Licensing) has to apply for and be granted a license before it is legal to do so.

The process involves sending an application form to the licensing committee which is then used to establish whether the landlord in question is ‘fit and proper’ to run a HMO and whether they have the managerial skills to run a HMO adequately.

Past landlord conduct is taken into account, as is any criminal activity, antisocial behaviour and other adverse information. It is an offense to lie when filling in the form, and should a license be granted on the basis of false information the landlord can face fines of up to £20,000.

Scottish landlords are also required to register with their local authority under the Scottish Antisocial Behaviour Act 2004.

Letting any type of residential property without registering is illegal and may result in a fine of £5000 and the withholding of the rental payments.

 

Land Registry

The world’s largest property database that includes the property titles for well over £1000billion worth of property. The land registry is an official database. The Land Registration Act 2002 made it compulsory to add property titles to the database as they were updated. The Act also gives the legal owners of property titles a greater degree of protection from squatters.

 

Leasehold

A leasehold tenure is a form of property ownership that expires after a fixed number of years. Owners of a leasehold property only do so for the number of years specified in the lease. The lease often stipulates the need for the owner to complete necessary repairs and pay ground rent as well.

 

Local Government Ombudsmen

A body of Government officials that investigate complaints associated with all manner of council matters, including those associated with local authority housing. There are 3 Local Government Ombudsman panels in England that deal exclusively with public complaints from their general vicinity.

 

Local Housing Allowance

This type of housing benefit has replaced the old style housing benefit in the vast majority of the country. It allows tenants to claim a fixed amount of money towards rent payments and is based on other benefits they claim and their income. The tenant can then choose a property to suit their needs with a rental value equal to their local housing allowance or slightly more, the difference being made up by the tenant.

 

Local Search

An application made to a local authority for details about a property being sold and the immediate surrounding area. The results of a local search show up things which may affect the property in the future e.g. proposed building works, road building projects, plans for open cast mining and even unfilled mine shafts that could cause subsidence in the years to come.

 

LIBOR

The acronym LIBOR stands for ‘London Inter Bank Offered Rate’ and is the interest rate at which banks lend money to other banks. The LIBOR fluctuates from day to day, and any type of mortgage that is linked to the LIBOR normally has its interest rate updated every 3 or 6 months.

 

Loan to Value

This is the amount a bank will lend in the form of a mortgage loan compared to the value of the property the mortgage is being used to purchase. Most mortgage lenders are happy to lend between 60% and 80% of the property value however the bigger the deposit a buyer can provide the better mortgage deal they are often offered.

 

Mandatory Grounds for Possession

There are 8 Mandatory Grounds for Possession that a landlord can present to a county court and automatically be granted possession – providing the required length of notice has been given to the tenant and all procedures have been followed correctly.

The 8 mandatory grounds are as follows:

• The property is required by the landlord to be their main residence

• The mortgage lender on the property is foreclosing on the mortgage

• The property is required to return to holiday letting after a fixed tenancy period ends

• The property is owned by an educational institution as a student let and the tenants are no longer students

• The property is owned by a religious body and they require it for a new tenant

• The landlord wishes to redevelop or demolish and reconstruct the property

• The tenant is a resident heir of a former tenant and is not named on the original tenancy agreement

• There are outstanding rent arrears of more than 8 weeks if paid weekly, two months if paid monthly and one quarter if paid quarterly.

 

Mortgage

A legal document/deed that uses either a freehold or leasehold property as collateral for a loan – the money from which is used to purchase the pledged property. If payments are not kept up on a mortgage the mortgage lender has the right to possess the property and sell it in a bid to recoup the loan amount.

 

National Approved Letting Scheme (NALS)

NALS is an accreditation scheme for letting agents and management agencies that is nationally approved in the UK. Members agree to address customer complaints in a professional and satisfactory manner, constantly meet defined, high standards of customer service and take out any necessary insurances to protect any monies belonging to clients.

The scheme is approved by the following:

• The Association of Residential Letting Agents

• The National Association of Estate Agents

• The Royal Institution of Chartered Surveyors

 

National Association of Estate Agents (NAEA)

The NAEA is currently the UK’s largest professional body of registered estate agents. With over 10,000 members the NAEA aims to improve and maintain the professional standards of estate agents country wide so that clients always benefit from the services offered.

 

National Federation of Residential Landlords (NFRL)

The NFRL is the overseeing professional body that brings together over 40 independent landlord associations throughout Great Britain and Northern Ireland.

 

National Inspection Council for Electrical Installation Contracting (NICEIC)

The NICEIC is the electrical industry’s regulatory body that has overseen electrical safety matters and consumer safety for nearly 50 years. Electricians are not required by law to register with the NICEIC however those that do so voluntarily are obviously more than willing to show their competence within their trade.

 

National Landlords Association (NLA)

The UK’s largest association for private landlords whose aim it is to protect its members from the potential pitfalls of private letting by passing on large quantities of useful information. Members of the NLA can benefit from newsletters, fact sheets, forms and reports, discounted insurance products and digital information products.

 

New Building Regulations

Brought in January 2005, the New Building Regulations specify that all major electrical work within a new property must be carried out by a certified person, such as a registered member of the NICEIC (see above)

 

NHBC

The acronym NHBC stands for the National House Building Council and is the standard setter for quality construction when it comes to new buildings and those that have been renovated.

The aim of the NHBC is to improve the building standard of new builds so that homeowners in the future don’t suffer. Builders and other construction workers can voluntarily register with the NHBC and by doing so they promise to abide by the council’s rules and standards.

Thus a new build with a NHBC certificate will have been constructed by only NHBC registered builders and will meet only the highest standards of construction.

 

Non-Resident Landlord’s Scheme

This is a government scheme used to tax the rental income of all non-resident landlords i.e. those that don’t use the rental property as their main residence. For more information on the non-resident landlord scheme and how tax is calculated and deducted please visit www.hmrc.gov.uk/cnr/nr_landlords.htm

 

Non-status

The offer made by a mortgage or loan provider to lend money without proof of income and often without previous mortgage payment records. These non-status facilities are often capped though and it is rare for a mortgage provider to lend more than 70% loan-to-value even following a favourable credit search.

 

Notice to Quit

A Notice to Quit is the formal notice given to the tenant of a rental property explaining that they will be expected to vacate the property at the end of the current assured shorthold tenancy period. The notice can be given in written form or verbally but it must specify the date that the tenancy is to come to an end. At least two full months notice is required and a Notice to Quit cannot be presented within the first six months of the tenancy.

 

Off Plan

A commitment made by a property investor to purchase a property before it is even built. The property can only be seen on plans and may not be built for several years.

 

Office of the Deputy Prime Minister (ODPM)

The Government department responsible for housing, planning and new building regulations, urban policy, the effects of homelessness and numerous other aspects of life. The ODPM is headed by the Deputy Prime Minister of the time and has a very useful website giving information on letting residential properties.

 

Periodic Tenancy

A tenancy is described as ‘periodic’ when the landlord fails to issue a new tenancy agreement when the initial assured shorthold tenancy agreement comes to an end. The terms and conditions of the original agreement still apply to the tenancy and the tenant, and the obligatory 2 months notice is still required should the landlord want to repossess the property.

 

Possession

There are numerous aspects of Possession. For more details see ‘Discretionary Grounds for Possession’, ‘Mandatory Grounds for Possession’ and ‘Grounds for Possession’.

 

Quiet Enjoyment

Clauses present within most tenancy agreements that protect the tenant from unsolicited interruptions from either the landlord or the agents working on behalf of the landlord. Quiet enjoyment allows the tenant to live within the property as if it were their own.

 

Reduced Data Standard Assessment Procedure (RDSAP)

The industry agreed standard in the form of a statistical table that allows independent Domestic Energy Assessors to calculate the energy efficiency of a rental property and the average energy usage.

 

Registered Rent

This is the maximum amount of rent that can be charged for a particular property. Each property’s registered rent is available to see on the publically available Rent Register and is fixed at that amount until a new determination is completed or until the current tenant quits the property. Registered rents are determined by either the Rent Service or a Rent Assessment Committee.

 

Regulated Tenancy

A Regulated Tenancy is an old style private tenancy that was entered into before the introduction of assured tenancies in 1989. The holder of a Regulated Tenancy is guaranteed long-term security of tenure and the right to a Fair Rent assessed by an independent Rent Officer. If either the tenant or the landlord is unhappy with the amount of rent deemed fair by the rent officer then they have the right to appeal. Even if an existing tenant had their Regulated Tenancy changed to an assured shorthold tenancy after their introduction in 1989, they still maintain the long-term security of tenure.

 

Rent Assessment Committees

Rent Assessment Committees listen to and review Fair Rent decisions made by Rent Officers when either the tenant of a Regulated Tenancy or the landlord of a property with a Regulated Tenancy objects. Tenants with assured tenancies can also go to a Rent Assessment Committee to ask for the current market rent amount for the property they are renting.

For more information about Rent Assessment Committees or to download relevant rent assessment forms please visit the Valuation Office Agency Website at www.voa.gov.uk/

 

Rent Assessment Panels

5 rent assessment panels make up the Residential Property Tribunal Service and between them they cover the length of the country. See ‘Residential Property Tribunal Service’ for further information.

 

Rent Officer

A member of the local authority whose job it is to assess claims for housing benefit. They often work in conjunction with the Rent service to make sure the rent being asked for is within normal limits and that the property in question is suitable for the claiming tenant e.g. a single person asking for housing benefit to pay for a 4 bedroom house is not reasonable.

 

Rent Service

The Rent Service, also known as the Valuation Office Agency is an agency within the Department for Work and Pensions. Among other things the Rent Service carry out private rental assessments for Local Housing Allowance purposes, make Fair Rent determinations when required, and provide useful information, on an informal basis, to a wide variety of customers and clients within the public and private sectors.

 

Rental Yields

Gross rental yield = the annual rent claimed from a property shown as a percentage of its capital value or purchase price. Net rental yield = the annual rent minus expenses shown as a percentage of the capital value or purchase price. Rental Return = the annual rental income minus costs plus any annual capital appreciation shown as a percentage of the original monetary investment in the property.

 

Repayment (Mortgage)

A type of mortgage in which each monthly payment is split between paying the accumulated interest and the capital of the loan. If everything goes as planned the borrowed amount should be completely repaid at the end of the mortgage term.

 

Repo Rate

The name used for the ‘Bank Base Rate’ before 1997. See ‘Bank Base Rate’ for more details.

 

Residential Property Tribunal Service (RPTS)

The RPTS is an independent body made up of five distinct rent assessment panels – each of which services a specific area of the country. The main aim of the RPTS is to help landlords, tenants and leaseholders to end rental disputes before they reach the repossession and county court stage.

 

Royal Institution of Chartered Surveyors (RICS)

A global, professional body that oversees all aspects of property and real estate, new construction works, and the associated environmental impact of said construction works. Members of RICS regulate the work of all manner of property professionals in over 100 countries worldwide.

 

Schedule A

Schedule A is used to determine the tax payable on income earned from buy to let properties. Most other forms of business earnings are taxed using Schedule D and this needs to be remembered if you do your own tax returns. The IR150 leaflet from the Inland Revenue explain in depth how Schedule A works.

 

Section 21 Notice

The notice given to a tenant informing them that they will be required to vacate the property at the end of the tenancy agreement. For more details see ‘Notice to Quit’.

 

Stamp Duty

Stamp duty land tax is the amount payable by a property vendor when the property is sold. The amount to be paid is dependent on the selling price of the property and is calculated as a percentage.

As of April 2011 the stamp duty land tax amounts are as follows:

• For properties sold for less than £125,000 there is no stamp duty to be paid.

• For properties sold between £125,001 and £250,000 a stamp duty of 1% is payable (although this is waived for first time buyers).

• For properties sold between £250,001 and £500,000 a stamp duty of 3% is payable.

• For properties sold between £500,001 and £1million the stamp duty is 4%.

• For properties sold for more than £1million the stamp duty is 5%.

Stamp duty is also applicable to some rental agreements and leaseholds however the terms vary. For details please visit the HM Revenue & Customs website.

 

Standard Variable Rate (Mortgage)

A mortgage product characterised by a variable interest rate that fluctuates in line with the Bank of England’s base rate. The term ‘standard’ refers to the fact that it isn’t ‘discounted’ in any way.

 

Tenancy Deposit Protection

Since the 2007 changes to the Housing Act landlords who take a deposit from tenants are required to enter it into one of a range of tenancy deposit schemes. The money is then kept safe until the tenancy ends and it is returned to the tenant.

There are two main types of tenancy deposit scheme:

• Custodial whereby the deposit money is paid into a registered scheme

• Insured whereby the landlord keeps the deposit money and pays an insurance premium to protect it.

Landlords who fail to deposit money into either type of tenancy deposit scheme become ineligible to regain possession of their property using ‘notice only’ grounds.

 

Tenancy Deposit Scheme

See ‘Tenancy Deposit Protection’ above.

 

Title Deeds

A range of legal documents, including the land certificate, that prove current ownership of a freehold or leasehold property. Title deeds are usually given to or made available for a property buyer on completion of their property purchase.

 

Tracker Mortgage

A type of variable rate mortgage in which the interest rate of the loan is linked to the bank base rate set by the Bank of England. So for example, if the bank base rate rises by 0.5% so does a tracker mortgage’s interest rate, and likewise if it falls by 0.5% i.e. it tracks the bank base rate.

 

Void Periods

Periods of time during which a property available for rent sits unoccupied by tenants. Void periods are normally measured in days.