Knowledge is Power - House Buying Jargon Explained

By Sue Warwick National Sales and Marketing Director of Miller Homes.

We’ve had an increase in potential home buyers investigating the possibility of purchasing their own place thanks to shared equity schemes such as MiWay or Home Buy Direct.

It can sometimes be overwhelming with all the jargon that mortgage advisors and solicitors band around – often met with a puzzled nod and a nervous murmur.

However it is vitally important for people entering into the sometimes confusing arena of house buying to know what to expect so we’ve pulled together a guide to the lingo to help them through the process.

Deposit – This forms the initial contribution that the buyer is required to make to purchase a new home. The deposit is paid on exchange of contracts.
Conveyancing – The legal process that transfers ownership of the property from the seller to the buyer. This tends to be carried out by a solicitor or licensed conveyancer.

Exchange of contracts/Conclusion of Missives – If you’ve reached this point the transaction is almost complete. Legally binding contracts are exchanged between the buyer and the seller and at this point the vendor has a legal obligation to sell and the buyer to buy under the agreed terms.

Completion – Once contracts have been exchanged completion can occur. Completion is the day when the buyer and the seller finally exchange money (through their solicitors) – this is when the buyer becomes the legal owner of the property and can move in.

If this has helped here are some other terms used that will help house hunters become more at ease with the puzzling property market…

Freehold – describes the type of ownership (or tenure) on the property purchased… If the buyer purchases a freehold property they also purchase the land beneath the home.

Home Information Pack (HIPs) – A HIP is a set of documents that the seller must provide that gives the seller detailed information on the property. The seller cannot market the property without a HIP (Home Report in Scotland). Miller Homes provide a HIP for customers if they are part exchanging their current home for a new Miller Home. For more information on HIPs visit www.direct.gov.uk

Stamp duty – is a tax that is paid to the government the value of which is dependent on the price the buyer pays for the property. Homes under £175000 are currently exempt from stamp duty as part of the government’s policy to lend a helping hand to potential house buyers. Stamp duty rates currently stand at:

Residential property - purchase price Rate of Stamp Duty Land Tax
up to £175000 = 0% (until 31 December 2009 inclusive)
£175001 - £250000 = 1%
£250001 - £500000 = 3%
£500001 or more = 4%

(Information taken from www.direct.gov.uk)

I hope this has given some property market novices a taste of lexical freedom and the confidence to investigate their options to step onto the property ladder – after all knowledge is power!
Published: