Glossary

What is a freehold ? - The freeholder of a property, owns it the property and/or land outright. If you buy a freehold, you are responsible for maintaining your property so you will need to budget for these costs. ​

Benefits of having a freehold - You do not have to worry about the lease running out, as you own the property outright. There is no freeholder (often known as the landlord) to pay ground rent to and there are usually no service charges or other such charges. ​

Owning a share of freehold - If you own the Leasehold interest of a property, you may be able to buy the freehold from the landlord possibly alongside other leaseholders - for example, other people living in a block of flats. You can do this as long as at least half of the leaseholders agree to buy a share. Although purchasing the freehold may be expensive, by doing this it gives you more control over your home and the costs you pay out.
What is a Leasehold? - With leasehold, you own the property and its land for the length of your Lease with the freeholder. You are able to sell the Leasehold interest in the property on the same terms. When the lease ends, ownership returns back to the freeholder, unless you can extend the lease. Most flats and maisonettes are owned leasehold, apart from in Scotland where there are very few leasehold properties. When you buy a leasehold property, you’ll take over the lease from the previous owner. ​

There are number of consideration when buying a Leasehold Property. They include how many years are left on the lease, how much is charged annually for the service charge, ground rent and related costs. How long is left on the length of the lease might affect getting a mortgage and the property resale value. ​


What is a common-hold property? - Commonhold is a type of freehold ownership. It is designed to help flat owners get full ownership of their property, instead of having it on a lease. Everyone within a building or block of flats comes together to form a company, known as a Common-hold Association. That company then owns the freehold of the building.






What is an Apartment / Flat? - If you are in the market for a flat, apartment, or a studio flat, we have put together this handy guide to help you choose the right type of place for you. They may not be unique to live in, but there are some key differences between them. ​

The difference between Flats and Apartments - Simply put, apartments are self-contained private residences contained within a larger building. Those living in an apartment usually rent, and therefore they are tenants. But this also can be true of flats and studio apartments. Apartments are typically located in complexes of buildings or gated communities, sometimes with a management office nearby, and often with a dedicated community convenience shop, amongst other amenities like communal gardens and parking areas. An apartment can consist of many rooms, potentially spread across a couple of floors inside a building; a flat will, as the name suggests, be all on one level of a building. ​


What is a HMO? - If you let a property which is one of the following types it is an HMO:

An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.

A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.

A converted house which contains one or more flats which are not wholly self contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households. ​


Land / Development - Property development includes a range of activities from the purchase of land, development of facilities and buildings to meet customers' requirements. It also includes either the sale or lease of the land of properties on completion. Developers generally coordinate the activities converting plans, needs and ideas into property.

property development includes:

Industrial estates
Residential property
Business parks
Warehouses
Logistics distribution centres
Office buildings ​


What is a Refurbishment / Renovation? - The question of whether to refurbish or renovate is important, as it can mean the difference between saving and losing money. No matter the reason why you need to make alterations to your property, be it because you want to improve its appearance or make it safer for tenants, understanding how one concept varies from the other is always important. However, it can be difficult to know when to choose one over the other, as the terms can often seem interchangeable.

What Do They Mean? - First and foremost it’s important to understand the differences between the terms ‘refurbishment’ and ‘renovation’, as it can make all the difference when it comes down to the decision making – and the final look of the property. It can be difficult to distinguish between the two, since they can be quite similar at a first glance; however, their meanings are not the same and when deciding on the modifications you should make to your property, getting the terms right is crucial! ​


Briefly these structured deals offer the investor the following options:-  ​

For an initial upfront fee:- 

1. Give back the property : Manage the property for the term of the lease and retain the Net Rental Income. Then exercise your option to hand it back to the original owner after the lease term. ​

2. Sell The Property: Exercise your option to sell the property at anytime during the lease term and any amount ( Equity ) you receive over and above your original fixed purchase price and the Net rental income up until the day you sell is then retained by you. ​


What is a delayed Completion? - A delayed completion is something commonly used but can receive a cold response from  a  property owner, this is until they fully understand the benefits of it.

But in essence it is no different to when you buy a new house. You exchange and then complete at a later date. In simple terms a delayed completion is where you exchange on a property for a nominal figure. And then you complete at a predetermined date at a later stage, this can stretch as far  6 months to ' x ' years  ( all deals vary ). Delaying the completion saves a lot of headache and cost to the buyer, whilst being  more profitable for the seller in the long run. 

Recently we helped and seller trying to sell a property consisting of a commercial shop on the ground and a very tired and unused flat above. It also had an outbuilding and large garage that could be to used. As the property was part commercial and part residential, financing this project was a nightmare, no mortgage providers would touch it as it didn't tick the box of either residential or commercial - it was both. ​


What is a Rent to Rent? - ‘Rent-to-rent’ or ‘guaranteed rent’ has become a popular with many of our investors. In a rent-to-rent arrangement the landlord grants a lease to an investor. The investor then finds tenants who will occupy the property on a short term basis. This is different from using a managing agent because the landlord will be paid a fixed rent regardless of occupancy for the whole of the terms by the ‘middle tenant’ and the landlord has no direct contractual relationship with the occupiers of the property. ​

Rent-to-rent is when you rent out a property to a tenant on a single let basis. This tenant will rarely live at the property, and will be free to sub-let its rooms as they see fit. Depending on the type of property and the agreements made, sometimes the arrangement involves a small amount of refurbishment work, converting offices/lounges etc into extra bedrooms.

The sub-letter will then rent out the property to (usually 4+) separate tenants while paying the property’s single let rent and bills, while pocketing the difference. This takes away some of the uncertainty and unpredictability that landlords face when using a managing agent. ​