Reference

A glossary of housing terms

Every term used across the chapters, defined in plain language and in the sense in which the chapters use it.

A

Agreement in principle: A lender's provisional statement of what it would be prepared to lend, based on information supplied and a preliminary credit check. It is not an offer and binds nobody, but it demonstrates that an offer on a property could realistically be funded.
Amortisation: The process by which a loan balance is reduced by regular payments. Because interest is charged on the outstanding balance, the interest portion of a level payment falls over time and the capital portion rises.
Asking price: The figure at which a property is marketed. It is a starting position set before any response from buyers, and it is not evidence of value on its own.

Chain: A sequence of dependent transactions in which each party's purchase relies on their own sale completing. No participant has authority over the others, and the whole sequence moves at the pace of its slowest link.
Completion: The point at which funds are transferred, the transfer is executed and possession passes. Registration of the change of ownership follows afterwards, often by some months.
Condensation: Moisture already present inside a building depositing on cold surfaces. It is a function of moisture production, ventilation and insulation rather than of a defect in the wall, and it is frequently mistaken for damp entering from outside.
Conveyancing: The legal work of transferring an interest in land: establishing title, making searches, raising and answering enquiries, preparing the transfer and registering the result.
Covenant: An obligation attached to land, most often a restriction on what may be built or done there. Restrictive covenants bind successive owners and can survive long after the party who imposed them has ceased to exist.

Damp-proof course: A barrier built into a wall to prevent moisture rising from the ground. Its absence, failure, or bridging by raised external ground level is a common cause of low-level damp.
Detached: A dwelling that shares no wall with another. It gains light and access on all sides and the greatest scope for extension, at the cost of land and of a larger external envelope to maintain.

Easement: A right over land belonging to someone else, such as a right of way or a right to run and maintain a drain or cable. An easement may benefit a property, burden it, or both.
Exchange of contracts: In England and Wales, the moment at which a sale becomes binding on both parties, a completion date is fixed and a deposit is paid. Before it, either side may withdraw without liability.

Fixed rate: An interest rate held constant for a defined period, usually shorter than the loan term. It provides payment certainty within that window and typically carries a charge for repaying early.
Freehold: Ownership of land, and ordinarily of what is attached to it, held indefinitely and without a landlord.

Ground rent: A periodic payment made by a leaseholder to a freeholder under the terms of a lease. Its amount and any mechanism for escalating it are set out in the lease itself.

Heave: Upward movement of the ground beneath a building, commonly following the removal of a large tree when clay soil rehydrates and expands. It is the opposite phenomenon to subsidence.
Household formation: The rate at which a population divides itself into separate households. It determines how many dwellings a given population requires and responds to housing costs as well as to demography.

Leasehold: A right to occupy property for a fixed term granted by a freeholder, subject to the covenants in the lease. The unexpired term, the service charge and the ground rent are its defining variables.
Loan to value: The size of a loan expressed as a percentage of the property's value. It is the principal measure of a lender's exposure and the strongest influence on the pricing offered.
Local authority search: An enquiry made of the local council about planning permissions, building regulation approvals, enforcement, road adoption, designations and proposals affecting a property. It commonly confirms whether past alterations were consented.

Negative equity: The condition in which the outstanding loan secured on a property exceeds the property's value. It constrains moving and refinancing rather than affecting the loan itself.

Penetrating damp: Moisture entering the fabric of a building from outside through a defect such as failed pointing, a blocked gutter or a defective roof detail. It is usually localised and corresponds to a visible external fault.
Porting: Transferring an existing mortgage and its rate to a different property on a move. Whether it is available depends on the product terms and on a fresh assessment.

Recorded price: The price entered in public records after a sale completes. It describes a decision made months earlier and is therefore a lagging indicator of conditions.
Remortgage: Replacing an existing loan with a new one on the same property, without the property changing hands. It involves a fresh affordability assessment and a fresh valuation.
Rising damp: Moisture drawn upward from the ground through porous masonry where no effective barrier exists, showing as a tide mark with salt deposits at low level. It is less common than the volume of remedial treatment sold against it implies.

Searches: The set of enquiries made during conveyancing of public bodies and data holders, covering local authority matters, drainage and water, environmental risk and any additional enquiries required by location.
Semi-detached: A pair of dwellings sharing a single party wall, each with access and light on three sides. The side passage is the feature that makes later side extension so common.
Service charge: A contribution paid by leaseholders towards the cost of maintaining, insuring and managing the parts of a building held in common. Its level, its coverage and the state of any reserve fund are all material.
Setback: The distance a building stands back from the street. It records what the street was expected to carry, and it is among the most frequently altered dimensions in older districts.
Settlement: The initial downward compression of ground under the weight of a new structure. It is normal, it stops, and it is distinct from subsidence.
Stock and flow: The distinction between all dwellings that exist in an area and the small proportion available for sale at any moment. Because the flow is small, a few transactions set the reference price for the whole stock.
Subsidence: Downward movement of the ground beneath a building's foundations, caused by soil shrinkage, washing out of material by leaking drains, or historic made ground. Its consequences are often as much about insurance and saleability as about structural danger.

Terraced: Dwellings arranged in a continuous row sharing party walls. It is the most land-efficient house form, with light from two ends and a narrow plan.