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Education > Jargon Buster > P to Z


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to P to Z. Part of the most comprehensive Property Investing JARGON BUSTING DICTIONARY on the internet!

P | Q | R | S | T | U | V | W | Y

 

P

P&L (Profit & Loss) – Accounting report of the profit on sales over a fixed period, normally one year.


PA (Per Annum)
– Amount due on a yearly basis


Partnership - An agreement between two or more entities to invest or go into business together.

Passive Income - Income generated from rents, royalties, dividends, interest and gains from sales of securities.

PCM (Per Calender Month) – Amount due on a monthly basis following a Gregorian calender

Periodic Tenancy - A periodic tenancy comes into being when a landlord does nothing to reclaim possession at the end of an original assured shorthold tenancy and allows the tenants to remain without issuing a new tenancy agreement. The terms and conditions of the original assured shorthold tenancy agreement remain in place, as does the right of the landlord to bring the tenancy to an end by service of the required two month’s

Physical Deterioration - A reduction in a property’s value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear.

PI (Professional Indemnity) – Insurance that protects your business from financially crippling and damaging claims by dissatisfied clients. Cover to protect against Negligence or breach of duty of care, Intellectual property - unintentionally infringing on others’ copyrights, trademarks, broadcasting rights, any act of passing off, Loss of documents/data: damaged, lost or stolen data and documents belonging to your clients, Dishonesty: liability arising from the theft of your clients’ money.

PIC (Property Investment Clubs) – Utilisation of bulk purchasing power by use of Joint Ventures with other investors. Membership usually required. Massive negotiating power, are often able to purchase well below OMV and in large multiples

PIQ (Property Information Questionnaire) – Part of HIP (Home Information Pack). Vendors must fill in this section giving details of Council Tax banding, Structural information, Flood risk , Parking arrangements and Lease details (for leasehold properties)

Planning Permission – Needed before commencement of works or alterations on property.

Portfolio - The combined holdings of real estate assets by an investor.

Possession – when the Purchaser takes over legal control of the premises. There is a distinction from Occupation as only an owner or potential owner can possess, whereas a tenant can occupy without any intention of owning the property

Power of Attorney - A written instrument authorizing a person, the attorney-in-fact, to act as agent for another person to the extent indicated in the instrument.

PP (Planning Permission) – Consent from the planning department of a local authority to carry out approved works on a property including extending a property. Dividing off part of a property for business or commercial use or for a separate dwelling. Using a building or caravan in a garden as a separate dwelling. Building a parking place for a commercial vehicle. Minor changes are allowed without needing to apply for planning permission. See Permitted Development Rights

PPR (Principal Private Residence) – Tax reference for owners main home. Exempt from capital gains tax when sold

Principal - The amount of money loaned without counting interest, costs, or fees.

PROBAS (a Property Buyers Association) – Unregulated body established in 2007 due to the need for high ethical, moral and professional values within the sale and rent back industry. Whilst awaiting regulation, PROBAS members will adopt best practice procedures in line with the FSA principles of 'Treating Customers Fairly, ensuring all of its members have the highest standards of practice.

Probate - A legal process by which a court determines who will inherit a decedent’s property and what the estate’s assets are.

Property – Asset. Dwelling or building which its owner has a legal title to.

Property Investment Clubs (PICs) – Utilisation of bulk purchasing power by use of Joint Ventures with other investors.

PPRR (Principle Private Residence Relief) – Used to mitigate CGT on second homes. 2 year window to decide which of your properties is to be your PPRR in order to maximise the relief on the biggest gain from each residence.

PRS (Private Rented Sector) – Classification of UK housing tenure. Dwellings owned by Private landlords.

Purchase Price – The price at which something is purchased or amount of money required to complete the sale

PW (Per Week) – Amount due on a weekly basis

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Q

Quiet Enjoyment - Allowing tenants ‘quiet enjoyment’ is an implied term within any letting agreement and affords tenants the right to uninterrupted use of the property during the course of their tenancy without interference from the landlord or the landlord’s agents

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R

RACs (Rent Assessment Committees) - When a landlord or tenant of a Regulated tenancy has objected to the rent assessed by the Rent Service, the case will be passed to a Rent Assessment Committee to decide the Fair rent. Tenants with assured tenancies may also apply to the RAC for a determination of the open market rent they should be paying. They may also apply if the landlord serves notice of a proposed rent increase. Tenants with assured shorthold tenancies may also apply within the first six months of their tenancy. Rent assessment committees are made up of two or three people – a solicitor, a property valuer and a lay person, all of whom are drawn from panels of people with appropriate expertise. There are 14 rent assessment panels in England and Wales appointed by the Government. The rents they set will be the legal maximum that can be charged for one year from the date of the decisions, after which an application for an increase can be made. Relevant forms are available from the Rent Service website

Rate cap - The limit on the amount the interest rate can be increased each period in an adjustable-rate loan. The cap may also set the maximum interest rate that can be charged during the life of the loan.

Rate of Return – See ROI

RdSAP (Reduced Data Standard Assessment Procedure’) - An industry agreed standard that allows Domestic Energy Assessors to calculate energy usage by reference to standard tables.

Real Estate - A parcel of land and everything attached to it (US).
Real estate investment trust (REIT) - Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax.

Redemption – Paying off (redeeming) a mortgage, either at the end of the mortgage term or when you move to another property or switch to another lender

Refinance - To replace an old loan with a new loan.

Registered rent - Rent included on the publicly available Rent Register as determined by the Rent Service or Rent Assessment Committee recording the maximum that can be charged until a new determination is agreed or the tenant leaves

Regulated tenancy - Most continuing private tenancies entered into before 15 January 1989 are regulated tenancies under the Rent Act 1977. This means that the tenant has long term security of tenure and that both the landlord and the tenant have the right to have a Fair rent registered for the tenancy by an independent rent officer. Both also have a right to appeal to a rent assessment committee if they are dissatisfied with the rent officer's decision. Once a rent is registered, the landlord cannot normally charge a higher rent without reapplying to the rent officer and a new application for registration is not possible for two years unless there is a relevant change of circumstances. The Housing Act 1988, which introduced assured and assured shorthold tenancies at market rents for most new lettings on or after 15 January 1989, did not change existing tenants' rights to security of tenure and rent control

REITs - (Real Estate Investment Trusts). Tax-efficient investment funds to make property more popular with big investors.

Re-mortgaging - Moving mortgage from one mortgage value to a higher value, or one lender to another, without moving house.

Rent - A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties.

Rent Assessment Committee - See ‘Residential Property Tribunal Service’

Rent officer - A local authority official responsible for housing benefit. He or she will usually rely on the local Rent Service to assess whether the rent being asked is reasonable or not, or whether the property is too large for the needs of the claimant

Rent Service -This is an executive agency of the Department for Work and Pensions which carries out rental valuations for housing benefit purposes, makes fair rent determinations; advises local authorities about the effects on rent of housing renovation grant applications by landlords; and carries out rental valuations and provides information, on a more informal basis, for a variety of customers within the public and private sector

Rental yields - Precise definitions can vary but the gross rental yield is usually taken to be the annual rent of a property as a percentage of its capital value or acquisition price. The net rental yield is the annual rent after deducting expenses as a percentage of capital value or acquisition price. The rental return or capital return is the annual income from renting less the costs plus annual capital appreciation as a percentage of the original investment in the property

Repayment Mortgage – Also known as a capital and interest mortgage. Your monthly repayments consist of instalments of capital (the amount of money you have borrowed) as well as interest due on the amount you borrowed

Repo rate - The rate set each month by the MPC as the benchmark for other interest rates, including personal loans and mortgages

Repossession - Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default

Residential Property Tribunal Service – Formed due to the increased powers made available to Residential Property Tribunals under the Housing Act 2004. Umbrella organisation for the five regional offices or Rent Assessment Panels which provide the support for three statutory tribunals (The Rent Assessment Committee ,The Leasehold valuation tribunal, The Residential Property Tribunal ),which make decisions on residential property matters.

Return on Investment (ROI) - The amount earned per year on an investment, usually expressed as a percentage of the investment.

RICS - Royal Institution of Chartered Surveyors. The professional body of the property sector. 110,000 members globally and represents, regulates and promotes the work of property professionals throughout 120 countries

RICS Valuation – An ESTIMATED value of what price a property could possibly achieve on the open market. Usually a value range calculated in the residential market by comparative valuation with surrounding properties of a similar specification.

ROI (Return On Investment) – Percentage figure showing the ratio of profit or loss made on investment in relation to the amount of money invested

ROCE (Return on Capital Employed) – Financial return from initial investment calculated as a gross or net figure. Annual Rent minus Interest divided by Deposit and Acquisition Costs

RPTS (Residential Property Tribunal Service) - An independent body whose remit covers England aims to provide a fair and accessible tribunal service to help landlords and tenants and leaseholders settle disputes about rents and about leasehold property. Made up of five regional Rent Assessment Panels, each covering a different geographical part of the country - London; Southern England; Northern England; the Midlands; and Eastern England. Rent Assessment Panels do not have the power to deal with all types of dispute about rents and leasehold matters

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S

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.

Seasoning - This term 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 8 notice - Notice to tenant to quit due to them being more than 8 weeks in arrears with the rent. Warning - if the tenant brings the arrears of rent to less than 8 weeks, even if that is the day before an eviction Court heaing, the notice is no longer valid.

Section 21 notice - See also ‘Notice to quit'. Notice to a tenant that he or she must vacate a property at the end of an assured shorthold tenancy agreement

Security deposit - A payment by a tenant held in escrow during the lease term and kept (wholly or partially) on default or destruction of the premises by the tenant.

Security of Tenure – Variable dependant on 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.

Service charges - Service Charges are paid by leaseholders and tenants living in blocks of flats. The charges cover the cost of: Upkeep and landscaping and other shared areas. 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.

Snagging - The process whereby small defects in a new property are identified and referred to the developer to be rectified.

Stacking - The process of assessing a deal by comparing the financial variables within it, in order to see if the deal is financially viable.

Stamp Duty - A charge levied by the government on house purchases over £125,000.
Up to £175,000 (until 2 September 2009 inclusive) = 0% , £175,001 - £250,000 = 1%
£250,001 - £500,000 = 3% , £500,001 or more = 4%

Survey - A thorough evaluation of the condition and value of a property. A map or plot plan depicting the property boundaries, improvements, easements, rights of way, encroachments, and other physical features.

Statute - A law established by the act of the legislative powers; an act of the legislature.

Sub-letting - The leasing of premises by a lessee to a third party for part of the lessee’s remaining term.

SVR (Standard Variable Rate) - Can go down, as well as up, during the course of your mortgage. Normally based on The Bank of England’s Base Rate

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T

TDS (Tenancy Deposit Scheme) - The Housing Act 2004 has provisions for mandatory tenancy deposit protection. As from 6 April 2007 landlords who take deposits have been required to comply by participation in a custodial or insured tenancy deposit scheme.

Tenancy - An agreement between a landlord and the person/s who who take legal residence in a property in return for rent payments


Tenancy deposit protection – Government Legislation introduced in 2007 any landlord taking a monetary deposit must safeguard it by participating through membership in a tenancy deposit scheme. There are two types of scheme available – a custodial scheme which holds the deposit, or insured schemes whereby the landlord retains the deposit but pays an insurance premium. Both approaches include dispute resolution arrangements. Until deposits have been safeguarded by a scheme, landlords are unable to regain possession of the property using usual 'notice only grounds'.

Tenancy in common - Ownership of property in which several owners each own a stated percentage of the property. Each owner may deal with their portion of the property as they wish (giving it away, mortgaging it, bequeathing it, etc.) and, upon their death, their share becomes part of their estate.

Tenant - The person who takes legal residence in a property in return for rent payments

Tenements - Possessions that are permanent and fixed to land.

Tenure - Amount of time granted for renting a property

Term - The length of time taken to repay your mortgage.

Testate - To die leaving a valid will: opposite meaning is to die intestate.

Time-share - A form of joint ownership of property where numerous owners share title and enjoy use or occupation of the property according to a specific schedule.

Title - The legal term for written evidence that the owner of the land has lawful possession.

Tracker Mortgage – This is a mortgage that is set at a fixed percentage or 'margin' above the Banks base rate. E.g it could be set at base rate plus one percentage point. So, if the banks base rate rises by a percentage point, so does your rate. It will also 'track' the Bank of England Base rate when this rate goes down. Tracker rates continue over the term of your mortgage

Trust Deed - The legal document used to create a trust.

Trustee - One designated to hold property for another, pendingthe performance of an obligation.

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U

Underwriting - In mortgage lending, the process of determining the risks involved in a particular loan and establishing suitable terms and conditions for the loan.

Usurp – To overturn or better a previous agreement

Usury - Charging an illegal rate of interest.

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V

Valuation - An independent assessment of the value of a property carried out by an approved surveyor. Paid for by the customer, the valuation is used by the lender to decide how much they are prepared to lend. Many customers also choose to arrange a more comprehensive survey for their own purposes before they decide to buy a property.

Variance - An exception to a zoning ordinance granted to meet certain specific needs, usually
given on an individual case-by-case basis.

Void Costs - These are the costs associated with an empty property and can include the cost of repairs to that property or the rent loss from that property whilst it is empty

Void - A term used to describe a property which is not let.

Void Loss - Rents lost as a result of non-occupation of a property


Voids - Empty rented properties generating no income.

VAT (Value Added Tax) - A form of indirect taxation levied on goods and services at the point of sale

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W

WFTC - Working Families Tax Credit - Means Tested Benefit given to working families with children on a low wage to top up living expenses. If you are not claiming them the check your eligibility with Tax Credits

WTF – Expletive often used by Landlords and Investors when they open the post in to discover a large bill

Will - A written statement of a person’s wishes for the disposition of their estate, after their death.


Y

Yield - The annual rate of return on an investment, expressed as a percentage. See also ROI

 

 
 

 
 

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