Jargon Buster

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Term Definition
Sale And Rent Back
When you buy a property and then rent it back to the people you have bought it off. You must now comply with FSA regulations for perform SARB.
Schedule A
Letting income is taxed under schedule A.

Although expenses may be set against income there are special rules that apply which vary from those which apply to most other types of business income, which is taxed according to ?Schedule D'.

The Inland Revenue has an explanatory leaflet, IR150, which can be downloaded.
Stamp Duty Land Tax
Sealed Bids
If there are two or more interested parties in the purchase of a property then the offer will often be decided via Sealed Bids.

This means that the purchase prices offers are made by each party in a sealed manner, i.e. provided via sealed envelope.

When all bids are received the offers are unsealed and the best purchase price is selected.
Refers to the determining of whether there are any unwanted/adverse effects in relation to a particular property.

Should cover things that are already in place and things that are being planned.
Refers to the pay history on a loan. A loan that is ?seasoned? will have at least six months of pay history.

Non-seasoned loans are more risky than seasoned loans because they lack a pay history.
Section 21 Notice
Notice to a tenant that he or she must vacate a property at the end of an assured shorthold tenancy agreement.
Section 8 Notice
Notice to tenant to quit due to them being more than 8 weeks in arrears with the rent.

Beware that if the tenant reduced the arrears of rent to less than 8 weeks, even if that is the day before an eviction Court hearing, the notice is no longer valid.
Security Deposit
Payment by a tenant held in escrow within a deposit protection scheme and kept (wholly or partially) on default or destruction of the premises by the tenant.
Security Of Tenure
This depends on the tenancy type:
  • Periodic: it will only come to an end either by an order of the court or surrender by the tenant.
  • Fixed Term tenancy: may be ended either by the passage of time, or by the landlord exercising the power to end the tenancy if clause in agreement grants the right.

If a fixed term assured tenancy comes to an end in one of these ways, a new periodic assured tenancy will be created, known as a statutory periodic tenancy. Security of tenure remains.

In order to regain possession, the landlord may only do so on one of a number of statutory grounds which are set out in Schedule 2 of the Housing Act 1988. To obtain an order for possession, the landlord must serve a section 8 notice on the tenant, setting out the ground or grounds that are relied on and then, after a period of time that varies depending on the grounds chosen, apply to the court for possession.
Self Build
When you build the property yourself, either yourself by hand or hiring builders, surveyors etc to be involved with the planning and building.
Self Build Mortgage
A mortgage taken on to build a property. It the loan amount is generally paid out in stages as the building is progressing.
Self Certification Mortgage
A mortgage where a buyer does not provide evidence of there income but instead they state their income and sign a confirmation of their ability to repay the mortgage.

Normally the rates of a self certification mortgage will be higher than those of a standard mortgage.
Service Charge
Service Charges are paid by leaseholders and tenants living in blocks of flats. The charges may cover the cost of:

  • Upkeep and landscaping of shared grounds
  • Repair, maintenance & cleaning of exterior and internal communal areas. ( inc. shared lighting, heating or emergency alarm systems).

  • Service charges are based on the actual cost of delivering the service. They are reviewed once a year and may increase or decrease.
Shared Ownership
A scheme operated by various Housing Associations where the borrower buys and owns part of a property i.e. a percentage such as 40%, 50%, 75% etc and they pay a mortgage on the percentage they own.

The Housing Association owns the rest of the property and the borrower pays rent to the Housing Association on this.

The borrower would normally have the right to purchase a higher percentage of the property in the future.