The planning and property industry is full of words and phrases that might be confusing to those not regularly buying, renting or selling land or property.

There can be a lot to get your head around – complicated paperwork, lengthy contracts and unfamiliar language that everyone else around you seems to understand perfectly.

Not sure on the difference between freehold and leasehold? We’re here to assist.

We’ve put together a helpful list of planning and property terminology that, whether you work in the industry or not, you might come across:

Affordable housing: Housing provided to eligible households at an affordable cost.

Agreement in Principle (AIP): An estimate of how much money you can borrow when getting a mortgage – based on factors such as income and credit score.

Annual Percentage Rate (APR): The total cost of a loan, taking into account standard fees, interest charges and other costs, shown as a percentage.

Below market value (BMV): A property price that is lower than the average market value.

Breach of Conditions notice: A notice, served by a local planning authority, where a condition in a planning permission agreement has been breached.

Bridging loan: A temporary, short-term loan which enables a buyer to purchase a property before selling their current property, often accessed while external factors are being finalised.

Building survey: An in-depth inspection of a property, providing a detailed evaluation of a building’s physical state.

Buy to let: A mortgage for someone who wants to buy a property, to then rent it out, making them a landlord.

Buy to sell: A mortgage that allows someone to buy a house through a short-term loan, often to carry out renovation work to sell for a profit.

Compulsory Purchase Order (CPO): An order issued by the government or a local authority, without consent of the owner, to acquire land or buildings for the wider public interest – for example, to regenerate an area or for the construction of a major road.

Core strategy: A local plan document that sets out a long-term vision for a local area.

Council tax: A tax set by local authorities to meet their budget requirement to pay for services.

Covenant: A rule which states what can and cannot be done on the land that is attached to a property.

Due diligence: The process of ensuring a property is securely evaluated before purchase.

Deposit: The amount of money you pay upfront towards the full cost of a property. A mortgage or bank loan covers the rest and is split up into smaller payments.

Development: “The carrying out of building, mining, engineering or other operations in, on, under or over land, and the making of any material change in the use of buildings or other land” – Section 55 of the Town and Country Planning Act 1990.

Easement: The right of a landowner to make use of another nearby piece of land as a right of way.

Environmental Impact Assessment (EIA): When applying for certain types of planning permission, an environmental statement is often required, evaluating the likely environmental impacts of the development, together with an assessment of how the severity of impacts could be reduced.

Equity: How much of a property you own; the amount of mortgage that has been paid.

Exchange of contracts: The point at which both the buyer and the seller are committed to a sale of a property. Until it has been ‘exchanged’, either party can withdraw the deal.

Freehold: When a property owner owns the building and the land it’s on.

Green Belt: A designation of land surrounding certain built areas, which has aims to be kept largely undeveloped and open.

Gross Development Value (GDV): The estimated value of a property or new development, including all units on one site at the current market rate.

Greenfield: Land that has not previously been developed.

Help to buy scheme: A government scheme aimed at helping first-time buyers on to the property market, providing them with an equity loan of up to 20% (up to 40% in London) of the value of a new build home.

House of Multiple Occupation (HMO): A property rented out by at least three people who are not from one household (such as a family) but share facilities such as the kitchen and bathrooms.

Housing Price Index (HPI): A guide to the change in property value.

Interest rates: A percentage rate added to the amount you pay back on a loan; a charge for borrowing money.

Leasehold: Owning a property for a fixed amount of time, not including the land it sits on. Once the lease comes to an end, the ownership returns to the landlord. For example, you might buy a flat, but not the building it’s in.

Local Enterprise Partnership: A locally owned partnership between local authorities and businesses, determining local economic priorities and taking action to drive growth and create jobs within an area.

Loan to Value (LTV): The ratio of how much your mortgage will cover the price of your property, as a percentage.

Permitted development: A universal set of rights that allow certain building work to be carried out without the need for planning permission.

Planning consultant: A company that specialises in providing advice on planning matters.

Previously developed land (brownfield land): Land which is or was occupied by permanent structure.

Planning permission: To carry out home improvements or large-scale commercial projects, planning permission is required from local planning authorities.

Planning condition: A condition imposed on a planning permission grant, for example opening hours for a bar or shop.

Preliminary Risk Assessment (PRA): An assessment to establish the previous uses of a land under consideration to identify potential hazards.

Quantity surveyor: Estimates and regulates costs for large construction projects, making sure that structures meet legal and quality standards.

Return on equity: The return received on a real estate investment compared to the amount paid, as a percentage.

Stamp duty: A tax that anyone buying a property or land over a certain amount must pay, calculated as a percentage of the property’s purchase price.

Valuation: The process of getting an estimate of the financial value of a property.

We hope this guide will help you to understand a little more about the property terminology you’ll likely come across.

To make some suggestions we could add to this list, or for further guidance and information, contact us.

Dean Williamson

Dean Williamson MRICS