Property Glossary

The lender's fee for setting up a mortgage, charged flat or as a percentage of the loan. On BTL products percentage fees can reach 3% or more and materially change the true cost of a deal.

A planning restriction that removes permitted development rights in an area, most commonly requiring planning permission to convert a family home into a small HMO.

The standard tenancy type in England since 1 May 2026. It rolls month to month with no fixed term, and can only be ended by the tenant's notice or a landlord using Section 8 grounds.

The interest rate the Bank of England pays on reserves, set by the Monetary Policy Committee. It anchors variable mortgage pricing, while fixed rates follow market expectations of where it is heading.

The mortgage interest rate at which a rental property's monthly cashflow hits zero. The single clearest measure of how much rate risk a leveraged deal carries.

Short-term, interest-heavy finance used to buy quickly or fund works before refinancing onto a mortgage or selling. Priced monthly, typically 6 to 18 month terms.

Buy, Refurbish, Refinance, Rent: a strategy where you add value through refurbishment, then refinance at the higher value to pull capital back out for the next purchase.

Tax paid on the profit when you sell a property for more than you paid for it, after deducting allowable costs and reliefs.

The annual pre-tax cashflow from a property expressed as a percentage of the total cash invested, measuring the return on your actual capital deployed.

Tax paid by limited companies on their profits, currently 19% for profits under £50,000 and 25% for profits over £250,000.

Electrical Installation Condition Report: the safety inspection of a rental property's fixed electrical installation, required at least every five years, with a copy given to tenants before they move in.

A certificate rating a property's energy efficiency from A (most efficient) to G (least efficient), legally required for lettings and sales.

The gradual deterioration of a property through normal everyday use, which a landlord cannot charge the tenant for at the end of a tenancy.

The specialist tribunal handling residential property disputes in England, including rent increase challenges, rent repayment orders, licensing appeals, and leasehold disputes.

Outright ownership of a property and the land it stands on, with no time limit and no landlord above you. Standard for houses; for flats, the freehold is usually held separately from the leases.

The annual certificate confirming a Gas Safe engineer has checked all gas appliances, fittings, and flues in a rented property. A copy must reach the tenant before they move in.

Annual rental income as a percentage of the property's purchase price, before any costs are deducted.

An annual fee paid by leaseholders to the freeholder for the right to occupy the land, typically a fixed amount or increasing on a schedule.

A person who agrees to cover the tenant's obligations, usually rent, if the tenant does not pay. Common for student lets and applicants with limited UK credit history.

A property rented to three or more tenants from two or more households who share facilities like a kitchen or bathroom.

A payment of up to one week's rent that reserves a property for an applicant while referencing completes. Strict rules govern when it must be refunded and when it can be kept.

The ratio of rental income to mortgage interest payments, used by lenders to assess whether a property generates enough rent to cover the mortgage.

A mortgage where monthly payments cover only the interest, leaving the full loan balance to repay at the end of the term. The standard structure for UK buy-to-let lending.

A detailed, dated record of a property's contents and condition at the start of a tenancy, ideally with photographs. The baseline document for every deposit deduction.

Ownership of a property for a fixed term under a lease, without owning the land it stands on. Standard for flats in England and Wales, and the subject of a long-running reform programme.

Using borrowed money to control a larger asset than your cash alone could buy. Leverage multiplies returns on the way up and losses on the way down.

The mortgage amount expressed as a percentage of the property's value, determining how much you borrow versus your deposit.

HMRC's digital tax reporting regime. Landlords with gross property and self-employment income over £50,000 keep digital records and file quarterly updates, with lower thresholds phasing in through 2028.

The legal minimum energy rating for privately rented homes in England and Wales. Currently EPC E, rising to the equivalent of EPC C from 1 October 2030.

The historical ability for landlords to deduct mortgage interest from rental income as a tax expense, now replaced by a 20% tax credit under Section 24.

Annual rental income minus all operating costs, expressed as a percentage of the property price.

The Private Rented Sector Database created by the Renters' Rights Act: a national register that landlords in England will be legally required to join when it launches. Launch date still to be confirmed.

Replacing an existing mortgage with a new product, either with the same lender (product transfer) or a new one, to avoid reverting to an expensive standard variable rate or to release equity.

A tribunal order requiring a landlord to repay rent to tenants (or a council) for certain offences, such as operating an unlicensed HMO. Since May 2026 up to 24 months' rent can be reclaimed.

The biggest reform of English tenancy law in a generation. In force for tenancies from 1 May 2026: no fixed terms, no Section 21, statutory rent increases, and new tenant rights including pet requests.

The tax relief that lets landlords deduct the cost of replacing furnishings and appliances in a rental property. Replacements only: the original purchase is never deductible.

The legal requirement in England to check that every adult occupant has the right to live in the UK before a tenancy starts. Failures carry substantial civil penalties.

A tax paid to HMRC when purchasing property in England and Northern Ireland, with higher rates for additional properties and non-UK residents.

The statutory process for increasing rent on an assured periodic tenancy in England. Once a year, two months' notice, using official Form 4A. Since May 2026 it is the only lawful route.

The former no-fault eviction route in England, which let landlords end an assured shorthold tenancy with two months' notice and no reason. Abolished on 1 May 2026 by the Renters' Rights Act.

Tax rule from the Finance Act 2015 that prevents individual landlords from deducting mortgage interest as an expense, replacing it with a 20% tax credit.

The legal route for a landlord to seek possession of a rented property in England, using specific statutory grounds such as rent arrears, sale, or moving in. Since May 2026 it is the only route.

A council-designated scheme requiring ALL private rented properties in an area to be licensed, regardless of size or type. Operating without one is an offence.

An annual fee paid by leaseholders to cover the cost of maintaining communal areas, building insurance, and shared services.

Modelling how a property investment performs under adverse conditions such as rising interest rates, extended voids, or increased costs.

The rates at which banks exchange fixed for variable interest payments. They reflect market expectations of future base rates and drive the pricing of fixed-rate mortgages.

The legal requirement to place a tenant's deposit in a government-approved scheme within 30 days and serve prescribed information. Deposits are capped at five weeks' rent for most tenancies.

The time a rental property sits empty between tenancies, generating no income while fixed costs continue.