Jargon Buster

Words & Phrases

Shared Ownership –
If you can’t quite afford the mortgage on 100% of a home, Shared Ownership offers you the chance to buy a share of your home and pay rent on the remaining share. Later on, you can buy further shares or purchase your property outright.

Metro Finance –
Metro Finance assess every Shared Ownership applicant for affordability, if you pass the affordability assessment you can choose to use Metro Finance to obtain a mortgage, however you can choose any other broker, or go direct to a mortgage lender. There is no obligation to use Metro Finance for a mortgage offer, it is only essential that you pass the affordability assessment.

Sign off –
A document produced by Metro finance to confirm the property is affordable and sustainable for the applicant. All applicants must obtain a sign off to reserve the property.

On Hold –
The applicant has passed the initial financial assessment and wants to purchase the property and can place the property ON HOLD; the buyer now has 10 days to complete the remaining paperwork so that Metro Finance can complete further financial checks before the property can be placed Under Offer.

Under Offer –
The applicant has passed all the financial assessments and paid a refundable deposit on the property to place the property UNDER OFFER.

Rent to Buy –
A government scheme, which allows potential buyers to benefit from subsidised rent on a new build property they’ve selected and that qualifies for the scheme. After the the initial 5 year renting period, the tenant can decide between purchasing the property outright or through shared ownership.

Right to Buy –
The Right to Buy scheme helps eligible tenants in England to buy their home with a discount. Our leasehold team can assist you with any queries regarding eligibility.

Right to Acquire –
The Right to Aquire scheme helps eligible tenants in England to buy their home with a discount. Our leasehold team can assist you with any queries regarding eligibility.

Right to Shared Ownership –
Right to Shared Ownership scheme helps eligible tenants in England to buy their home through the Shared Ownership scheme.Our leasehold team can assist you with any queries regarding eligibility.

Homes England –
Homes England is a non departmental public body sponsored by the Department for Leveling up Housing and Communities. They are the Governments Housing and Regeneration Agency to drive regeneration and housing delivery.

Registered Provider/Housing Association –
This refers to a Registered Social Landlord/Housing Association. Housing associations (also known as Registered Providers (RPs) are organisations that are run independently from councils. They are now the main providers of new social housing in the UK. They are non-profit organisations, any profit is put back into the association to manage and maintain existing homes and to help build new ones.

2016-2021 Shared Ownership Model Lease –
Homes England require all Shared Ownership properties to be sold based on the Shared Ownership Model Lease. This lease allows the purchase of the initial share to be between 25% and 75% and does not include shares below 25%; a 10 year repairs reimbursement or 1% Staircasing, which were introduced in the 2021-26 lease.

2021-2026 Shared Ownership Model Lease –
Homes England require all Shared Ownership properties to be sold based on the Shared Ownership Model Lease. This lease allows the purchase of the initial share to be between 10% and 75%; a 10 year repairs reimbursement and 1% Staircasing. The Housing Association will make it clear which lease is being used for your purchase, houses purchased after 2021 could still be on the 2016-2021 model lease.

Local Connection Cascade –
Some Shared Ownership properties require the applicant to have a local connection to the borough or specific ward (the connection criteria will be specified in the lease). If there are no suitable applicants with the specific local connection for a Marketing time period (usually 3 months), then in some instances the criteria is relaxed and applicants from other areas can apply.

Valuation/Surveyor –
A person who assesses the open market value of the property being purchased for the mortgage lender.

Service Charge/Estate Charge –
A fee collected to pay for services related to property and surroundings. For Shared Ownership homes, the service charge includes buildings insurance from the Housing Association and a management fee.

Handover/Practical Completion –
This is when the properties construction work is finished and the developer hands over the keys to the Housing Association, and the property is ready for occupation.

Exchange of Contracts –
Exchange of contracts is when both parties sign the contracts. This is the point where you as the buyer will be asked to put down your deposit. This is a crucial stage of buying a home. Once the contracts are signed, you will be legally bound to buy the home.

Legal Completion –
The point of completion is when the sale or purchase of a property officially completes and the keys are passed to the purchaser and they become a leaseholder of the Shared Ownership property.

Conveyancing solicitor –
A conveyancing solicitor is a property lawyer who specializes in the legal aspects of buying or selling properties, it is important that you choose your solicitor carefully and ensure they have Shared Ownership experience and can guide you through the entire process. They will draft and review all the necessary legal documents involved in your property transaction.

Stamp Duty –
A tax you might have to pay if you buy a residential property in England or Northern Ireland over 250,000. The amount is determined by when you bought the property and the amount you paid.

Land registry –
Once you have purchased your property your conveyancing solicitor will make an application the Land Registry to put the property in your name. Land registry hold a reliable record of property ownership. Please note there is a significant backlog for registrations.

Percentage Share –
This is the share amount of the full price that you purchase – depending on your model lease, the share can be either 10% or 25%. The maximum amount you can purchase is 75%.

Affordability –
It is important that you can afford to purchase the property and keep up the mortgage, rent and bill payments as well as having some disposable income for other essential costs. The most common measure of housing affordability is the house price to income ratio.

Adverse Risk Policy –
Our adverse risk policy is:
• No CCJ’s or Defaults that remain unsatisfied, of any age
• No CCJ’s within last 2yrs, satisfied or unsatisfied over £250
• IVA’s or Bankruptcy discharged 3yrs ago acceptable
• Debt management plans paid off over 12 months ago acceptable
• No mortgage arrears in last 12 months
• Previous repossession over 3yrs ago acceptable, provided no outstanding debt to lender and no other credit issue in last 3yrs. (requires letter from repo lender to confirm no outstanding debt)

As we are a part of Jigsaw Homes, anybody who pays rent will need to meet this policy.

Leaseholder –
Someone who owns a property on a lease, typically between 99 – 999 years. You do not own the Freehold of the property. For Shared Ownership properties, the Housing Association owns the remaining share and it is common practice for the freehold interest to transfer upon final staircasing (when the property has been purchased outright), subject to the Housing Association having this interest.

Lease –
A legally binding contract outlining the terms of the lease, i.e. the amount of rent to be paid.

Contract –
A legally binding agreement, outlining the terms of the sale, i.e. purchase price.

Deed Plan/Red line plan –
A plan showing the boundaries of the property within a red line, this will include any parking spaces.

Defect –
A defect is a fault in the workmanship and construction of a new build property, or a fault in the installation or manufacturing of items and equipment which form part of the construction. Some common defects (also known as a repair) include: waterlogged gardens, external doors dropping/catching and leaking taps.

Snagging –
The process of checking a newly completed property for minor faults that need to be rectified. A snagging sheet is completed to reflect any faults/repairs that need to be completed – ideally – prior to handover.

Off Plan –
Buying off-plan means that you are agreeing to process the sale of a property whilst it is being constructed. This is based upon the developer’s architectural plans rather than physically viewing the property, hence the term ‘off-plan’. Snugg Homes insist that all buyers view the property prior to legal completion.

Developer/Contractor –
A company that builds new properties.

Landlord –
A person who owns the property and grants a lease or tenancy.

Local Authority –
The local authority refers to the council area the property falls within, and who you will pay your council tax to.

Staircasing –
Once you have legally completed on the initial share of your Shared Ownership home, you can purchase further shares in your property until you own it outright (if the lease is not restricted). This is known as ‘staircasing’. When you buy more shares you pay less rent.

New build –
A property that is being constructed/just constructed and never been occupied.

Re-sale –
Selling an existing Shared Ownership home is known as a resale.

Mortgage broker –
A person or company that arranges a mortgage for you though a lender.

Conveyancing process – Conveyancing is the sales process of buying a property. It is the legal process of transferring the ownership of a property from one party to another. It involves a series of legal and administrative tasks, such as property searches, document preparation, and financial transactions, to ensure a smooth and lawful transfer of property rights.

Affordable housing –
A collection of government schemes where properties are offered at below-market value, either for sale or rent. These schemes aim to help individuals who would otherwise struggle to rent or buy a property on the open market or a 100% of market rent.

Property Sales Co-ordinator –
Someone who manages the sales of a property to the buyer.

Key Undertaking –
A Key Undertaking is an agreement to allow the buyer access the buyer into the property prior to legal completion to fit flooring and sometimes leave furniture. This has to be done through the solicitors and can only be done after exchange of contracts.

Acronyms

HEC –
Homes England Calculator. Homes England have created this tool for Registered Providers to make an initial assessment of applicants’ eligibility for Shared Ownership, together with their ability to afford and sustain it over a period of time. This is the initial affordability assessment carried out by Metro Finance, on behalf of the registered provider.

DPA –
Designated Protected Area. Regulations that are in place to ensure that rural affordable housing remains in the ownership of local people. This may restrict staircasing to no more than 80%.

CML (handover) –
Council of Mortgage Lenders. The CML certificate is a document that is provided to confirm the property has passed a pre-handover inspection and is habitable. Once this is received, we will then take handover of the properties.

DIF (previously known as CML) –
Disclosure of incentives. This form is designed to ensure full disclosure of the financial aspects of the transaction and key information about the property. Typically provided to a surveyor in order to complete a mortgage valuation.

KIDS –
Key Information Document. The documents highlight key information about the property at various stages of the sales process.

MOS –
Memorandum of Sale. This is a written confirmation of the essential details of a property transaction. It’s a document that’s drawn up by the estate agent after the property goes from being on hold to reserved (under offer).

IFA –
Independent Financial Advisor. A person who gives advice about mortgages but who does not work for a bank or insurance company, Snugg Homes are not an IFA and buyers should seek their own advice before purchasing their property.