Jargon Buster

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Glossaries

Term Definition
Bank Of England
Central bank of the United Kingdom. Issues banknotes, and sets interest rates and monetary policy via the MPC.
Bank Of England's Monetary Policy Committee
The Committee that controls the setting of the Bank's Base Interest Rate, although the Government has the power to give instructions to the Bank on interest rates for a limited period. It meets monthly.

The rate set is the ?Repo' rate ? the base rate which sets a benchmark for other interest rates, including personal loan and mortgage interest rates.
Banker's Automated Clearing Service
Electronic funds transfer which is free of charge and takes 3 days -> They are entered into the system on the first day, processed on the second day, and cleared on the third day.

A Faster Payment alternative is also available that can be instant but may have to be requested depending on the bank, sometimes referred to as FastPay
Bankers Draft
A physical document like a cheque, however the money has already been debited straight from the account. The person receiving the bankers draft is therefore confident the money is safe and does not have to wait for clearing.

There is normally an administration fee to obtain a bankers draft, as well as you having to give a notice period, normally of at least 24 hours.
Base Rate
This rate is set by the Bank of England and is used as a benchmark for lenders to set interest rates by. It represents the lowest rate of interest a bank will charge you when it lends you money. It is reviewed monthly and can go up and as well as down.
Below Market Value
The purchase price agreed below the market value or the property, usually expressed as a percentage, 20%, 25% or 35% Below Market Value.

The Value could be vendor, estate agent or RICS surveyor valuation, however the true BMV will be off the RICS valuation only.
Beneficial Owner
This is the person owning land and who is therefore entitled to it for his/her own benefit. This is different from say a trust etc that may hold land for the benefit of someone else
Beneficiary
One who benefits from another, such as the act of invoking an insurance policy or deed of trust.
Benefit Overpayment
Is a deduction from existing housing benefit payments and used to recover payment from tenants. Such recoveries can impact upon rental income, creating a shortfall if such benefits are paid direct to landlord.
Block Management
This refers to the agents that manage/act on behalf of the freeholds and leaseholds, normally for a block of flats or apartments.

They will usually arrange things like:
Booking Fee
Another term meaning arrangement fee. Booking fees are normally paid upfront to book the rate.
Break Clause/Release Clause
Clause within a contract that allows the exit of that contract, normally with stipulations. These are sometimes used in conjunction with fixed term tenancies and will normally allow either party to get out (normally with about 2 months notice) before the end of the new term.

For example: in an AST after the first 6 months is over when it comes to renewal, either party (landlord or tenant), will often request that a break/release clause be entered into the agreement, if they are unsure whether they will want to continue renting the property for the duration of the next 6 months.
Bridging Loan
This is a temporary short term loan that enables you to buy a property and bridges the gap between the purchase of one property and sale of another. It should not replace a normal mortgage as the fees and interest are high.
Broker
This is a person that advises on mortgages (aka Mortgage Broker), or potentially any other financial product.
Building Insurance
Insurance that is required to cover against your property being damaged or destroyed. The sum insured covers the estimated cost of rebuilding the property. (keep in mind this can vary greatly from the market value of the property.)