Definitions

For a regulated mortgage, a lender must obtain evidence of the income the borrower declares, from a source independent of the borrower, and must not accept self-certification of income (FCA Handbook: MCOB 11.6.8R). For self-employed borrowers the evidence is usually HMRC tax calculations and accounts, and some lenders also ask the borrower's accountant to confirm the figures on a certificate or in a reference letter.

For a company director the certificate usually confirms the salary, the dividends, the shareholding and the company's net profit for recent years, and some lenders reading share of net profit also ask the accountant to confirm that retained profit is available to draw without harming the business. Lenders set their own rules on which accounting qualifications they accept, and some send their own form for the accountant to complete. A sole trader's or partner's accountant may be asked to confirm net profit and the current year's trading.

The Additional Dwelling Supplement is part of Land and Buildings Transaction Tax and is administered by Revenue Scotland. For transactions on or after 5 December 2024 it is 8% of the purchase price, charged on top of LBTT, on a residential purchase of £40,000 or more where an individual buyer already owns a residential property anywhere in the world and is not replacing an only or main residence. It also applies to most purchases of residential property by non-natural persons such as companies, even where the company owns no other residential property.

For purchases from 1 April 2024, a buyer who sold a previous main residence in the 36 months before the purchase is treated as replacing it and does not pay the supplement, and a buyer who buys first can claim it back if the previous main residence is sold within 36 months after the purchase. Revenue Scotland cannot consider exceptional circumstances. Revenue Scotland: Additional Dwelling Supplement.

Adverse credit covers anything on a credit file that shows an obligation was not met: arrears, defaults, county court judgments, a debt management plan, an individual voluntary arrangement, or a bankruptcy.

Lenders assess four things about it rather than its presence alone. How old it is, how large it is, whether it is satisfied, and what caused it. A satisfied default from four years ago on a small telecoms account is treated very differently from an unsatisfied judgment from last year on a mortgage.

Mainstream lenders publish tight limits. Specialist lenders price for the risk and take a broader view, and short-term lenders may not weigh credit heavily at all where the security and the exit are strong.

Affordability is a measure of how well you’ll be able to pay for a given mortgage. It entails being able to comfortably pay your mortgage on time, taking into account other factors like your debts, bills, and living expenses. Effectively, affordability on a mortgage means being able to pay for the loan while maintaining your lifestyle, and being able to continue to do so even if situations change.

Falling behind on mortgage payments can affect your credit score, so buying with affordability is incredibly important. Affordability exists to ensure you can continue to pay for a property, protecting both lenders and homeowners from purchases that can’t be afforded.

An affordability stress rate is the interest rate at which a lender tests the monthly payment on a residential mortgage, to check that the borrower could still pay if rates rose. Under the FCA's rule MCOB 11.6.18R a lender must consider likely interest rates over at least the first five years of the mortgage, having regard to market expectations, and must assume a rise of at least 1% over that period. The five-year test does not apply where the rate is fixed for five years or more, so a longer fix can be assessed at or close to its pay rate (FCA Handbook: MCOB 11.6).

The rule does not say which rate the test must start from. In March 2025 the FCA reminded lenders that adding a margin to a reversion rate can produce an unnecessarily high test. The Bank of England's separate affordability test, at 3 percentage points above the reversion rate, was withdrawn on 1 August 2022. Buy to let lending is tested differently, against the rent, under the rental stress test.

A lender’s initial indication of what it may lend, based on preliminary information and checks.

It is not a final mortgage offer or a promise to release funds. A full application, supporting evidence and an acceptable property assessment are still required.

Airbnb mortgages fall into three broad categories:

• A residential mortgage, if you’re letting a room, annex, or outbuilding on Airbnb while living in the property yourself, and your lender permits it.
• A buy-to-let mortgage (standard or specialist), if the property is let out on Airbnb as an investment and you don’t live there.
• A commercial mortgage, if the property is run more like a business, such as a guest house or a portfolio of short-term let units with trading history.

Airbnb mortgages must be structured correctly from the outset. Short-term letting is assessed differently from standard buy-to-let: lenders look at property type, planning use class, projected or historic income, your experience as a host, and whether the case fits residential, holiday let, specialist buy-to-let, or commercial criteria. Getting the wrong structure in place at application stage is one of the most common reasons Airbnb mortgage applications are declined or delayed.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 require covered businesses to identify customers and verify their identity, to monitor transactions, including where necessary the source of funds, and to apply enhanced due diligence in higher-risk cases. On a property purchase this usually means proof of identity and address and evidence of where the deposit came from.

The FCA says mortgage brokers are not bound by the regulations themselves but must still have systems and controls to prevent financial crime. FCA: money laundering and terrorist financing.

Areas are designated under section 82 of the Countryside and Rights of Way Act 2000, by Natural England in England and Natural Resources Wales in Wales. National planning policy in England places substantial weight on conserving and enhancing their natural beauty, and says major development in them should be refused other than in exceptional circumstances and where it is in the public interest. GOV.UK: AONBs, designation and management.

Under the credit industry's Principles for the Reporting of Arrears, Arrangements and Defaults, a temporary reduction in payments agreed by borrower and lender is recorded at the credit reference agencies as an arrangement, and the record must show that the account is subject to special terms. A payment holiday or a temporary change to interest only that is not part of the product's own terms can be recorded the same way. Arrears may still be calculated against the original terms, but a default would not normally be registered unless the arrangement is broken.

The agencies show arrangements in different ways, and how long one stays on the file depends on its terms. Mortgage lenders differ on how they read it: some treat a current or recent arrangement as adverse credit, and the time since it ended can affect which lenders and products fit. A plan negotiated by a third-party debt adviser is marked separately as a debt management plan.

A direction that removes specified permitted development rights for a defined area or property.

It can mean that work or a change of use needs a planning application even where national permitted development rights would otherwise apply. The direction’s wording, scope and effective date matter; it is not limited to HMOs. GOV.UK planning guidance.

An assured tenancy that continues from period to period rather than having a fixed end date.

In England, most private assured shorthold tenancies became assured periodic tenancies on 1 May 2026. The current rules govern notice and possession; other UK nations have different tenancy systems.

Sources: GOV.UK: tenancy changes.

A form of residential tenancy used under the Housing Act 1988, historically common in private renting in England.

Most private ASTs in England became assured periodic tenancies on 1 May 2026. Wales replaced most tenancy and licence arrangements with occupation contracts in December 2022. Check the applicable jurisdiction and any transitional provisions rather than treating an AST as the current default.

Sources: GOV.UK: tenancy changes, Welsh Government: occupation contracts.

Finance arranged to complete an auction purchase within the deadline set by the auction contract.

The funding may be a bridging loan or a mortgage, depending on the property and timetable. An initial lending indication does not guarantee that valuation, legal work and release of funds will be completed in time.

Section 179 of the Finance Act 2004 allows an occupational pension scheme to lend to a sponsoring employer on four conditions. The loan is no more than 50% of the scheme's net assets immediately before it is made. It is secured by a first charge on an asset, owned by the employer or someone else, worth at least the loan plus interest. It carries interest of at least 1 percentage point above the average base lending rate of six banks named in regulations, rounded up to the nearest 0.25%. It is repaid within five years in at least equal yearly instalments of capital and interest. If money is still owed on the repayment date, the date can be put back once, for up to five years.

A loan that fails a condition is an unauthorised payment, taxed on the employer, with a scheme sanction charge on the scheme administrator. A SIPP has no sponsoring employer and cannot make one. The loanback limit is a separate test from the scheme's own 50% borrowing limit. HMRC Pensions Tax Manual, PTM123200.

An automated valuation model estimates a property’s value using data and statistical methods rather than a physical inspection.

A lender decides whether the estimate and confidence level are acceptable for the property and loan. It does not inspect the condition of the building or guarantee completion speed.

The official occupancy surveys treat occupancy, ADR and revenue per available room (RevPAR) as the three main measures of hotel trading. They feed the going concern valuation of a hotel or guest house. Visit Wales: accommodation occupancy survey definitions.

A short-term property loan assessed for a borrower with adverse credit, with repayment planned through a sale or refinance.

The lender considers the age and seriousness of credit problems alongside the property and the exit. If a mortgage will repay the bridge, its lender must also accept the borrower’s credit history.

Read about bad credit bridging loans.

Bank Rate is the rate the Bank of England pays to banks, building societies and other financial institutions that hold money with it. The Monetary Policy Committee meets eight times a year to set it at the level needed to keep inflation low and stable.

A tracker mortgage charges Bank Rate plus a margin, a standard variable rate is set by the lender and need not follow it, and fixed rates are priced off market rates rather than Bank Rate directly. Bank of England: Bank Rate.

In England and Wales a person can apply online to become bankrupt, and an adjudicator at the Insolvency Service decides the application, or a creditor can petition the court. An official receiver or a trustee then deals with the person's assets. Discharge from the bankruptcy restrictions and debts usually follows after 12 months, although debts not included in the bankruptcy still have to be paid. While bankrupt, a person cannot borrow more than £500 without telling the lender. Where the bankrupt person's equity in the family home is more than £1,000, the trustee can sell the home or apply for a charging order, which fixes the amount the trustee will get when the home is sold later. The bankruptcy can stay on the credit file for six years from its date, and the Individual Insolvency Register is updated within three months of discharge (GOV.UK: when bankruptcy ends).

In Scotland bankruptcy is also called sequestration; the Accountant in Bankruptcy decides a person's own application, and discharge usually follows after a year, or after six months under the Minimal Asset Process (mygov.scot: bankruptcy). In Northern Ireland a bankruptcy order is made by the High Court in Belfast. Lenders treat a current or past bankruptcy as adverse credit and look at the discharge date. An individual voluntary arrangement is a formal alternative that leaves the person more control of their assets, and a debt relief order is a route for people with smaller debts and few assets. A bankruptcy restrictions order can keep the restrictions in place after discharge.

The official receiver asks for one where a bankrupt's conduct was dishonest or blameworthy, for example giving away assets or selling them for less than they were worth, or borrowing money they knew they could not repay. The bankrupt can agree to a bankruptcy restrictions undertaking instead, which has the same effect without going to court (GOV.UK: bankruptcy restrictions orders and undertakings).

While an order or undertaking is in force, the person must not borrow more than £500 without saying they are subject to restrictions, and cannot act as a company director without the court's permission. It is listed on the Individual Insolvency Register until it expires, so the restrictions can outlast the discharge from bankruptcy. Lenders treat a current order or undertaking as serious adverse credit.

Short-term finance to acquire or begin converting a barn before staged funding, a mortgage or sale repays the loan.

Lenders check consent, structural suitability, access and the conversion budget. Finance to buy the barn and funding to complete the works must fit the same repayment plan.

Read about bridging loans for barn conversions.

Finance for buying, refinancing or converting a barn into residential accommodation.

A completed, habitable conversion may suit a residential or buy-to-let mortgage. Funding the conversion itself can require staged self-build or development finance, depending on the intended use.

Before the reform, a self-employed person was usually taxed on the profits of the accounting year that ended in the tax year. From the 2024 to 2025 tax year, profits are taxed for the tax year itself, 6 April to 5 April, and a business with a year end other than 31 March or 1 to 4 April apportions its profits from two sets of accounts (HMRC helpsheet HS222).

2023 to 2024 was the transition year. A business with a year end outside 31 March to 5 April was taxed on its usual 12 months plus a transition period to 5 April 2024, less overlap relief. The resulting transition profit is spread over five tax years by default: at least 20% in 2023 to 2024 and the rest equally over the four years to 2027 to 2028, unless the trader chose to have more taxed sooner (GOV.UK: work out your transition profit). A tax calculation in those years can therefore show more taxable profit than the business earned in the year, which matters to a lender reading SA302s.

A below market value (BMV) mortgage is not a separate product. It is an ordinary mortgage where the agreed price is below the market value reported by the lender's valuer.

For an ordinary purchase, lenders that state a basis lend on the lower of the price and the valuation, so the discount does not by itself raise the loan. For a genuine concessionary purchase, where a relative, landlord or other connected seller knowingly passes part of the value to the buyer as a gift of equity, many lenders base the loan-to-value on the valuation and count the discount towards the deposit, usually with the loan capped at the discounted price. Others lend only on the price paid.

Which sellers qualify, the maximum loan-to-value, any cash deposit, the checks on the seller and how soon the property can be remortgaged all vary by lender and change over time.

Government guidance describes a BISF house as non-traditionally built, with steel-frame walls faced externally with vertical steel sheeting; about 35,000 were built between 1945 and 1950. The steel frame can corrode, and some types are known to be susceptible near the coast.

BISF is not one of the nationally designated defective types, but lender treatment differs: some decline BISF whether or not it has been reclad, while others consider it at a reduced loan-to-value on the valuer's report. See non-standard construction mortgages.

The discount reflects the market for the whole block and the costs, time and risks of separate sales. A lender may use block value rather than aggregate unit value, which can reduce the loan available.

Read how this affects the finance.

Breathing Space is set up under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, and the Insolvency Service runs it. A debt adviser applies on the person's behalf. A standard breathing space lasts up to 60 days; a mental health crisis breathing space lasts for the crisis treatment plus 30 days. During it most enforcement action and contact from creditors is paused, and most interest, fees and charges on the debts are frozen. Ongoing liabilities, such as a mortgage on the person's home, should be kept up where possible (GOV.UK: Breathing Space guidance for creditors).

The Insolvency Service keeps a private register of people in a breathing space, which is not published. Starting one should have no automatic effect on the credit file, but lenders that report payment information can keep doing so, so payments not made during it can still show as missed payments. Scotland has a separate six-month moratorium, which is recorded on the public Register of Insolvencies.

An arrangement that uses short-term bridging finance before moving to a buy-to-let mortgage.

The bridge may fund a purchase or works before the property is ready for longer-term letting finance. A proposed refinance is not guaranteed; check whether it is a separate application or a conditional part of the same arrangement.

Read about buy to let mortgages vs bridging loans.

Indicative bridging terms based on initial information, subject to valuation, legal checks and underwriting.

It is not a binding offer. The property valuation, title checks, evidence of the exit and full underwriting can change the amount or terms.

Read about bridging loan agreement in principle.

A short-term loan secured against property or land to cover a funding gap until an agreed repayment event, such as a sale or refinance.

The lender assesses the security, borrower and proposed exit. Interest may be paid during the term, retained from the advance or added to the balance. The agreement sets the repayment date and costs; a planned sale or refinance is not guaranteed.

Read about can a bridging loan affect your mortgage application?.

A build to rent scheme is valued as an investment: the rent roll, less operating costs and voids, capitalised at a yield. That investment value, not the sum of individual unit sales, is the gross development value the facility is sized against.

Because the exit is a refinance onto investment lending or an institutional sale rather than a sales programme, lenders underwrite the letting-up period and the operator alongside the build.

Schemes are commonly held in a single ownership with amenity space and on-site management, which is what distinguishes them from a block of flats sold individually.

In England and Wales the Building Regulations 2010 cover building work such as extending a building or making a structural alteration. A building control body checks the work and gives a completion certificate once it is satisfied the work complies. Where work was done without approval, the owner can apply for a regularisation certificate for work carried out on or after 11 November 1985 (legislation.gov.uk: Building Regulations 2010, regulation 18).

In Scotland a building warrant is needed before work such as an extension or a loft conversion starts, and a completion certificate is submitted to the council's verifier when it ends (mygov.scot: building warrants). Northern Ireland has its own building regulations, applied by councils. Lenders' and buyers' solicitors ask for these certificates, and work that is permitted development for planning purposes can still need building regulations approval.

During design and construction a higher-risk building is one in England at least 18 metres high or with at least seven storeys that has at least two residential units, or is a care home or hospital. Building control approval for it comes from the Building Safety Regulator and must be obtained before work starts, and a residential higher-risk building must be registered with the regulator before people live in it.

The leaseholder protections apply to a relevant building: a self-contained building in England with at least two dwellings that is at least 11 metres high or has at least five storeys. GOV.UK: building control approval for higher-risk buildings.

Buildings insurance pays to repair or rebuild the structure of a home, such as the walls, roof, floors and fitted kitchen and bathroom, after insured events such as fire, storm, flood, escape of water or subsidence. Its sum insured should be the home's rebuild cost, not its market value. Contents insurance pays to repair or replace belongings, and can be extended to belongings away from home. Buildings insurance is normally a condition of a mortgage (GOV.UK: how to buy a home), while contents insurance is the owner's choice. The owner of a leasehold flat usually pays for the block's buildings insurance through the service charge and insures only the contents.

Home insurance is regulated by the Financial Conduct Authority under its Insurance: Conduct of Business sourcebook (ICOBS), and since 1 January 2022 a renewal price cannot be higher than the price for an equivalent new customer. A consumer must take reasonable care not to make a misrepresentation when the insurer asks questions (legislation.gov.uk: Consumer Insurance (Disclosure and Representations) Act 2012, section 2).

A common use of a bridge loan for business acquisition is to purchase assets or acquire a company before arranging long-term financing. Business owners also use bridging loans to release equity from commercial properties, consolidate debt, cover unexpected VAT or tax bills, and fund renovation or development work. In property-backed sectors, business bridging loans are widely used to exit development finance or refinance commercial mortgages pending asset sale or long-term refinance.

For buy to let, the declaration is set out in article 4 of the Mortgage Credit Directive Order 2015. It must state that the agreement is entered into wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower; that the borrower understands they will not have the protections and remedies of the consumer buy to let regime; and that they should seek independent legal advice if in doubt. The agreement is then presumed to be for business purposes, unless the lender, or someone acting for it, knows or has reasonable cause to suspect that it is not (legislation.gov.uk: Mortgage Credit Directive Order 2015, article 4).

Article 61A of the Regulated Activities Order uses the same declaration and presumption for its business exclusions from a regulated mortgage contract, including the investment property loan and the second charge business loan; there the declaration says the borrower will not have the protection and remedies available for a regulated mortgage contract (legislation.gov.uk: Regulated Activities Order, article 61A). On buy to let, some borrowers are treated as business borrowers whatever they declare: one who bought the property to let and has not lived in it, or one who already owns other let property. A declaration also does not change the position where a related person lives in the property, because the investment property loan exclusion cannot then apply.

A business purpose loan is credit a borrower takes wholly or predominantly for the purposes of a business they carry on, or intend to carry on. The purpose matters for some exclusions and exemptions, but it does not decide on its own whether a loan secured on a home is regulated. Under article 61 of the Regulated Activities Order, a regulated mortgage contract is credit to an individual or trustees secured on land at least 40% of which is used, or intended to be used, as or in connection with a dwelling, and the FCA's perimeter guidance says the definition contains no reference to the purpose of the loan.

A first charge remortgage or further advance on the borrower's own home is therefore a regulated mortgage contract even where the money goes into a business. Article 61A excludes a second charge business loan (more than £25,000, ranking behind another mortgage and taken for the borrower's business) and an investment property loan, where less than 40% of the land is used as a dwelling by the borrower or a related person (legislation.gov.uk: Regulated Activities Order, article 61A). A loan to a company is outside the definition because the borrower is not an individual.

A mortgage for a residential property bought or held to rent to tenants rather than occupy as the borrower’s own home.

Lenders consider rental income, the property and the borrower’s circumstances. Repayment method, deposit requirements and regulatory classification depend on the product and the purpose of the borrowing.

Sources: MoneyHelper: buy-to-let mortgages.

Capital allowances let a business deduct some or all of the value of plant and machinery, such as equipment, machinery and business vehicles including vans, from its profits before tax. The annual investment allowance deducts up to £1 million of qualifying plant and machinery in the year it is bought (GOV.UK: capital allowances).

A sole trader or partnership using the cash basis claims capital allowances only on business cars; other equipment and vehicles bought and kept for the business are claimed as allowable expenses. Limited companies and limited liability partnerships cannot use the cash basis and claim capital allowances under traditional accounting. Either way, a large purchase lowers the net profit for the year it is claimed in, and so the income a mortgage lender reads for that year, even though the business keeps the asset.

Capital raising means taking out more borrowing secured on a property than is needed to repay the existing mortgage, so that part of the owner's equity is paid out as cash. On a home it is done by a remortgage to a new lender for a larger amount, a further advance from the existing lender or a second charge loan from another lender, each repaid monthly. Lenders ask what the money is for and set their own loan to value limits for capital raising.

On a home the borrower or a close relative lives in, the loan is normally a regulated mortgage, and any additional borrowing is assessed for affordability: the exception that lets a lender skip a fresh assessment on a new deal applies only where there is no extra borrowing beyond the balance, other than fees (FCA Handbook: MCOB 11.6.3R). Later-life borrowing without monthly repayments is a different product, equity release.

A commercial mortgage secured against premises used as a care home.

Assessment depends on whether the borrower operates the care business or lets the premises to an operator. Trading performance or lease income, property suitability and the operator’s required registrations are relevant.

The Care Quality Commission regulates health and adult social care in England. Care Inspectorate Wales regulates social care and childcare in Wales. The Care Inspectorate, legally Social Care and Social Work Improvement Scotland, registers and regulates care services in Scotland. The Regulation and Quality Improvement Authority monitors and inspects health and social care services in Northern Ireland.

For a care home mortgage or a property let to a care operator, the operator's registration and its inspection reports form part of the lender's assessment. CQC, CIW, Care Inspectorate (mygov.scot), RQIA.

The Cavity Insulation Guarantee Agency (CIGA), set up in 1995, has provided independent 25-year guarantees for cavity wall insulation fitted by registered installers in the UK and Channel Islands. See mortgage refused because of cavity wall insulation.

A mortgage arranged for a public figure whose income, assets or career require individual underwriting.

The term describes the applicant’s circumstances rather than a separate mortgage product. Contracts, royalties, company income and assets may need specialist assessment, particularly where earnings vary or the career is short.

Read about mortgages for celebrities.

Its formal name in England is a certificate of lawfulness of existing use or development, issued under section 191 of the Town and Country Planning Act 1990; GOV.UK calls it a lawful development certificate. A use is lawful if no enforcement action may then be taken against it and it does not breach an enforcement notice in force. Scotland's equivalent is issued under section 150 of the Town and Country Planning (Scotland) Act 1997.

A second kind, the certificate of lawfulness of proposed use or development under section 192 of the 1990 Act, confirms that a proposed use or building work would be lawful for planning purposes. A homeowner can apply for one where it is unclear whether an extension or loft conversion is permitted development. It covers planning only, not building regulations approval or listed building consent.

An HMO lender may ask for one where a property is used as an HMO without a specific planning permission, for example where the use began before an Article 4 direction came into force. GOV.UK: lawful development certificates.

The ranking of secured claims against a property, which affects the order in which lenders receive proceeds when the security is enforced.

A second charge normally ranks behind a first charge. Legal priority, enforcement costs and any agreement between creditors affect the distribution; a first charge is not a promise of full repayment.

Under the Construction Industry Scheme a contractor deducts tax at source from the labour part of a subcontractor's payments (not VAT or materials): 20% for a registered subcontractor, 30% for one who is not registered, and nothing where the subcontractor has HMRC gross payment status. A subcontractor can be a sole trader, a partnership or a limited company.

Lenders assess CIS income in different ways. Some average and annualise recent CIS payslips or statements, some deduct materials or expenses, and some assess CIS workers as self-employed on tax calculations or accounts, under their self-employed income rules.

How long the applicant has worked under CIS and how many months of evidence the lender reads are separate tests, and both vary by lender. A subcontractor with gross payment status may hold no deduction statements, so the evidence and the income figure depend on the lender.

Class Q is not automatic permission for every barn. Eligibility, the proposed works and prior approval requirements must be checked with the local planning authority before relying on the conversion as a lending exit.

Read how this affects the finance.

A close company is a company under the control of five or fewer participators, or of participators who are directors (legislation.gov.uk: Corporation Tax Act 2010, section 439). A company that is not UK resident is not a close company. A company owned and run by one or a few directors usually meets the test.

The status matters for qualifying loan interest relief: an individual who borrows to buy shares in, or lend to, a close company that is not a close investment-holding company can claim relief on the interest if they meet the material interest or working conditions. Close companies also have their own tax rules on loans to participators, covered under director's loan account.

Co-Ownership is the shared ownership scheme run in Northern Ireland since 1978 by the Northern Ireland Co-Ownership Housing Association, which is regulated and part funded by the Department for Communities. It is the only provider of shared ownership there, and the English shared ownership model does not operate in Northern Ireland.

The buyer chooses a home on the open market, new build or existing, within a property value limit the Department sets, and buys a share of 50% to 90% of it, usually with a mortgage on that share from a lender that works with Co-Ownership. Co-Ownership owns the rest, the buyer holds the home on a 99-year lease, and Co-Ownership charges rent on its share, set as a percentage of the share's value and reviewed each year. The buyer can buy further shares, known as staircasing, at the home's value at the time, up to full ownership, and can sell at any stage at market value (Co-Ownership: shared ownership in Northern Ireland).

Co-Own for Over-55s is a version without a mortgage, in which the buyer pays for at least half the home from savings or a sale. Co-Ownership purchases are outside the Mortgage Guarantee Scheme, whose rules exclude shared ownership. The Great Britain schemes are described under shared ownership.

A commercial bridging loan is a form of short-term finance secured against commercial or semi-commercial property. It is designed to provide fast, flexible funding where traditional commercial mortgages may be too slow, restrictive, or unavailable due to the property’s current status. Commercial bridging loans are commonly used where a property is not yet suitable for long-term mortgage finance, but is expected to be once certain issues are resolved. Typical examples include funding a lease extension or lease renewal, bridging a period while planning permission or change of use is obtained, or even providing time to build up trading accounts or stabilise rental income to secure a stronger commercial mortgage exit.

They are also used to purchase commercial property with short lease terms, vacant units, or assets requiring light refurbishment, where mainstream lenders would initially decline. Once the lease position is improved, planning is granted, or income is proven, the borrower can refinance onto a lower-rate commercial mortgage or sell the property. The loan-to-value available depends on the asset, the strength of the exit strategy and the borrower's profile. Both serviced interest (monthly payments, subject to affordability) and deducted or rolled-up interest (no monthly payments) are available, giving flexibility depending on cash flow and income evidence.

Bridging lenders differ in the commercial property experience they ask for, and pricing reflects the asset and the exit, so it can sit above residential bridging. The cost is weighed against the time it buys to reach a longer-term commercial mortgage once the property is improved or stabilised.

Mortgage finance for commercial property purchased or held as an investment and let to a business tenant.

The property’s rental income and lease terms support the lending assessment. This differs from an owner-occupied commercial mortgage, where the borrower’s own business occupies the premises.

A commercial mortgage is a bespoke, asset-backed loan secured against commercial, semi-commercial, or large-scale investment property, where lending is assessed primarily on income sustainability, asset risk, and valuation methodology, rather than personal affordability alone. These facilities are used by property investors, business owners, and owner-occupiers to fund acquisitions, refinances, or capital raising, and are suitable across all sectors and property types, including residential property portfolios, mixed-use and semi-commercial assets, as well as commercial lending structures applied to residential property.

Commercial mortgages are commonly used for non-standard residential arrangements, such as social housing, supported and care-based accommodation, serviced accommodation, and other operational or income-led residential models where standard residential finance is not appropriate. Lending is underwritten using sector-specific criteria, with affordability assessed on rental income for investment property or trading cash flow for owner-occupied premises, alongside income-led (MV1), vacant possession, or time-restricted valuations depending on the asset and strategy.

Loan structures, pricing, and terms vary according to property type, lease profile, tenant or operator strength, borrower experience, and market conditions. The maximum loan-to-value depends on asset quality, income security and any additional risk mitigants.

Committed expenditure is the FCA's term for a mortgage applicant's credit and other contractual commitments that continue after the mortgage begins. The FCA gives secured and unsecured loans, credit cards, hire purchase agreements, child maintenance and alimony as examples. A lender must take full account of it when assessing affordability, alongside income net of tax and the household's basic living costs, and must take reasonable steps to find the actual commitments, for example with a credit reference agency search or statements (FCA Handbook: MCOB 11.6).

Each lender decides how to count each commitment, for example whether to take a percentage of a credit card balance as a monthly cost, and a commitment due to end shortly after completion may be left out on a common sense view. Because the payment comes off the income the mortgage is tested against, clearing a commitment can raise the maximum loan by much more than the balance repaid. The FCA treats childcare as a basic quality-of-living cost rather than committed expenditure.

The legal basis is Part 11 of the Planning Act 2008. A council that charges the levy publishes a charging schedule after consultation, and the levy sits alongside any section 106 planning obligations on the same scheme. Scotland has no Community Infrastructure Levy. GOV.UK: Community Infrastructure Levy.

The director is the borrower and applies for the same mortgage products as any other borrower. A director whose shareholding reaches the lender's threshold is assessed as self-employed, and the lender reads the income in one of two ways: the salary and dividends the director drew, from HMRC tax calculations, or the salary plus the director's share of the company's net profit, from the accounts, which also counts retained profit. A director below the threshold is usually assessed as an employee.

Lenders set their own shareholding thresholds, years of accounts and averaging rules, so the same director can be offered very different amounts by different lenders. A mortgage on the director's own home is a regulated mortgage, and the lender must take account of the director's income net of income tax and National Insurance (FCA Handbook: MCOB 11.6). Buying property through the company is a different product, an SPV mortgage.

RICS describes a comparable as information used during a valuation as evidence to support the value of another, similar item, on the principle that a buyer looks at the prices achieved for similar items. The best evidence is recent, verifiable, from arm's-length transactions and closely similar to the property being valued; where it falls short, the valuer analyses and adjusts it using judgement. RICS: comparable evidence in real estate valuation.

In a concessionary purchase the seller knowingly accepts less than the home is worth, and the difference between the open market value and the price is treated as a gift of equity to the buyer. Some lenders that accept it work out the loan-to-value on their own valuation and cap the loan at the discounted price, so the gifted equity can replace some or all of the cash deposit. Others lend only on the price paid. Family sales are the type accepted most widely, and fewer lenders accept a landlord selling to a sitting tenant or an employer selling to an employee.

The discount must be an unconditional gift, with no repayment or share kept by the seller, confirmed in writing. Because the parties are connected, the sale also has tax effects. The buyer's Stamp Duty Land Tax is charged on the price paid, while a sale to a connected person is treated as made at market value for capital gains tax, and the discount can be a gift for Inheritance Tax (gov.uk: Inheritance Tax on gifts). A Right to Buy discount works in a similar way under each lender's own Right to Buy rules.

For capital gains tax, section 286 of the Taxation of Chargeable Gains Act 1992 connects an individual with their spouse or civil partner, their relatives, the spouses or civil partners of those relatives, and the relatives of their own spouse or civil partner, along with some trustee, partner and company links. A relative here means a brother, sister, ancestor or lineal descendant, so aunts, uncles, nieces and nephews are not connected (HMRC: CG14580 connected persons). A disposal to a connected person is treated as not made at arm's length, so the gain is worked out on the market value instead of the price, and HMRC applies the same rule to a sale for less than full value made to help the buyer.

Other taxes use their own versions. For Inheritance Tax the definition also includes uncles, aunts, nephews and nieces, and in Stamp Duty Land Tax the market value rule applies to a transfer to a company connected with the seller, not to a sale between individuals. On a concessionary purchase by a relative, the buyer pays stamp duty on the price while the seller's gain is measured at market value.

In England and Wales, a financial consent order can record an agreed property transfer or lump-sum payment. The mortgage lender’s consent and affordability checks remain separate from the court’s approval of the settlement.

Read how this affects the finance.

A residential mortgage is lent on the basis that the borrower lives in the property, so a borrower who wants to let it, for example after moving for work or failing to sell, must tell the lender and have its agreement first. MoneyHelper warns that letting without telling the lender could invalidate the mortgage, and that a lender that agrees may charge a higher interest rate, an annual fee or both (MoneyHelper: buy-to-let mortgages explained). The borrower's insurer also needs to be told.

Lenders decide case by case, and some decline. The alternative is to remortgage onto a buy to let mortgage; for a former home where the borrower owns no other let property, that can be a consumer buy to let mortgage, and where the borrower is buying another home at the same time it can be arranged as a let to buy.

A buy-to-let loan within the consumer buy-to-let regime because the borrowing is not wholly or predominantly for a business purpose.

Letting a former home can be relevant, but the classification depends on the circumstances. Consumer buy-to-let has a separate statutory framework and should not be described as identical to a regulated residential mortgage.

Sources: FCA: consumer buy-to-let framework.

The Consumer Insurance (Disclosure and Representations) Act 2012 replaced the older duty to volunteer information with a duty to take reasonable care not to make a misrepresentation, which in practice means answering the insurer's questions fully and accurately (legislation.gov.uk: CIDRA 2012, section 2). The standard is that of a reasonable consumer, and how clear and specific the insurer's questions were is taken into account. The Act applies in England, Wales, Scotland and Northern Ireland.

If a misrepresentation was deliberate or reckless, the insurer may avoid the policy and refuse all claims. If it was careless, the remedy depends on what the insurer would have done with the right answer: avoid the policy and return the premiums, treat the policy as written on different terms such as an exclusion, or reduce a claim in proportion to the higher premium it would have charged (legislation.gov.uk: CIDRA 2012, Schedule 1). Disputes can go to the Financial Ombudsman Service.

Some property and loan terms rise in line with CPI. English Help to Buy equity loans taken from 2021 to 2023 increase their interest rate each April by CPI plus 2%, and Scottish rent control areas link permitted rent increases to CPI.

ONS: inflation and price indices.

A contractor's income can be read in different ways: the day rate annualised over a set number of working weeks, the payslips from an umbrella company or a fixed-term employer, or the salary, dividends and profits in a limited company's accounts. The same work can give very different affordability results depending on which reading the lender uses.

Lenders with a contractor policy set their own rules on the number of weeks they annualise over, the contracting history they need, the time left on the current contract, the gaps they allow between contracts and how they treat umbrella pay. Some deduct umbrella or employer costs before annualising, and some do not accept umbrella income.

IR35, the off-payroll working rules, is a tax status that decides who deducts income tax and National Insurance. Lenders look at how the contractor is actually paid, rather than applying one rule to everyone inside or outside IR35.

A mortgage on a rural home where land, outbuildings, services or occupancy restrictions affect lender choice.

Acreage, business use, private services and planning restrictions can affect valuation and lender choice. Land is not automatically non-residential for SDLT simply because the holding is large.

Read about country house mortgages.

A county court judgment is the court's formal decision that money is owed. Most money judgments, including judgments entered in default because the claim went unanswered, are sent by the court to Registry Trust for the Register of Judgments, Orders and Fines, and from there to the credit reference agencies. The entry stays for six years from the date of judgment. Paid in full within one calendar month, it can be cancelled and removed. Paid later, it can be marked satisfied, and it then stays for the rest of the six years showing that it was paid. A judgment the court sets aside is removed (GOV.UK: CCJs and your credit rating).

Scotland's equivalent is a decree of the sheriff court, which the court can recall. Northern Ireland has its own judgments, enforced through the Enforcement of Judgments Office. Lenders treat a judgment as adverse credit, and older and satisfied judgments generally weigh less than recent unpaid ones (Registry Trust: guide to CCJs).

Lenders, phone companies and utility providers share monthly account data with the agencies. The agencies also hold electoral roll details and public records such as county court judgments and insolvencies. The three large agencies are Experian, Equifax and TransUnion, and MoneyHelper also lists Crediva as an agency that provides a statutory credit report. Not every lender reports to every agency, and the FCA's credit information market study found material differences between the files the three large agencies held (FCA, December 2023), so a lender can see a different history from the report you checked.

You can get your statutory credit report free from each agency. An inaccurate entry can be challenged with the lender or the agency, and under section 159 of the Consumer Credit Act 1974 you can add a notice of correction of up to 200 words. The Financial Conduct Authority regulates the agencies, and the data protection regulator, the Information Commission (ICO), oversees how they handle personal data.

The scores consumers see come from the credit reference agencies, each worked out from the data that agency holds and on its own scale. As at October 2026, Experian's runs from 0 to 1,250 and Equifax's from 0 to 1,000, and TransUnion is moving from a scale of 0 to 710 to one of 0 to 999, with score providers switching from September 2026 (TransUnion: support and FAQs). Bands such as fair, good or low are each agency's own.

Lenders do not decide on the number a consumer sees. They assess the information on the credit file, often from more than one agency, and apply their own scorecards and lending criteria, which they do not have to publish, so there is no minimum credit score for a mortgage. The ICO explains that each lender sets its own pass mark, so an application refused by one lender can be accepted by another (ICO: Credit explained). A score can be low because of adverse credit, or because of a thin file, high credit use, a missing electoral roll entry, recent credit searches or a financial association.

Every time an organisation looks at a credit file, the credit reference agency records a search, sometimes called a footprint, showing who searched, when and the type of search. A hard search follows an application for credit and other lenders can see it. Experian and Equifax keep hard searches visible to lenders for a year (Experian: data retention periods), and TransUnion shows searches for two years. The ICO says lots of searches in a short space of time can imply that a person is having problems getting credit (ICO: credit).

A soft search, such as checking your own report, an identity check, an eligibility checker or a quotation search while you shop around, is visible only to you and does not affect the score lenders see. Some lenders give an agreement in principle on a soft search and others record a hard search, so it is worth asking which before agreeing to one.

Every policy sold as critical illness cover by a firm that follows the Association of British Insurers' Guide to Minimum Standards for Critical Illness Cover must include three core conditions, cancer, heart attack and stroke, each defined at least as widely as the Guide's model wording. Insurers can add further conditions and go beyond the minimum, so the list and the definitions differ between policies. The current Guide is dated 16 September 2022 and was clarified in April 2023 (ABI: Guide to Minimum Standards).

Cover depends on insurance underwriting: an insurer may accept an applicant on standard terms, at a higher premium, with an exclusion for an existing condition, or not at all. Severity-based policies pay part of the sum assured for less serious diagnoses and the full sum for the most severe. When applying, the applicant must take reasonable care to answer the insurer's questions accurately (consumer insurance disclosure). Critical illness cover can be bought on its own or with life insurance, and it differs from income protection, which pays a monthly income while illness or injury stops the person covered from working, whatever the cause.

On a portfolio or revolving facility the lender takes a charge over each property, and the security documents make every property answerable for the whole limit. The lender gets security across the portfolio, and the borrower gets one facility in place of a separate loan on each property.

Selling or refinancing one property then involves the lender, because the charge over it is released only on the terms in the agreement, usually on repayment of an agreed release amount. A fall in the value of one property can affect the limit for all of them. Bridging lenders use a similar idea when they take a charge over a second property as additional security. See charge priority and portfolio mortgage.

HMRC guidance describes a debenture as giving the debenture holder, usually a bank or other lender, a charge over the debtor's assets as security for money lent. In development and commercial lending to a company, such as an SPV, a lender may take a debenture alongside its legal charge over the property and any guarantees it requires.

A charge created by a company must be registered at Companies House within 21 days of its creation, or it may be difficult to enforce if the company becomes insolvent. In company law the word has a wider meaning, covering bonds and other company securities.

Debt consolidation replaces several debts, such as credit cards, personal loans, overdrafts and car finance, with one new loan. When the new loan is secured on a home, through a remortgage, a further advance or a second charge mortgage, the monthly payment usually falls, but the debt becomes secured on the property, and spreading it over a long term can raise the total interest paid.

On a home the borrower lives in, the borrowing is a regulated mortgage. An adviser recommending one whose main purpose is consolidation must take account of the cost of repaying a debt over a longer period, whether it is appropriate to secure unsecured debt and, for a borrower known to be in payment difficulties, whether an arrangement with creditors would be more appropriate (FCA Handbook: MCOB 4.7A.15R). Where the loan is affordable only once the debts are repaid, the lender may have to make sure they are, for example by paying the creditors directly (FCA Handbook: MCOB 11.6.16R).

A debt management plan covers unsecured debts only, such as credit cards, loans and overdrafts. Unless the agreement says otherwise, creditors can still ask for the full debt later, and some providers charge set-up or handling fees (GOV.UK: debt management plans). Under the industry reporting principles, accounts in a plan are marked on the credit file as being in a debt management plan, and arrears can continue to be counted against the original terms, so defaults can appear alongside one.

Mortgage lenders treat an active or recent plan as adverse credit, and those that accept an active plan count the monthly payment as a commitment. In Scotland the statutory equivalent is a debt payment programme under the Debt Arrangement Scheme (mygov.scot: Debt Arrangement Scheme). A formal, binding arrangement with creditors is an individual voluntary arrangement.

A debt relief order is made by the Insolvency Service on an application through an approved debt adviser. To qualify, the person must owe less than £50,000, have less than £75 a month of spare income, less than £2,000 of assets and no vehicle worth £4,000 or more, and must not own their home. There has been no fee since 6 April 2024. The order lasts 12 months, during which the creditors named in it cannot chase the debts, and the debts are then written off. While it runs the person must not borrow more than £500 without saying they have a DRO and cannot act as a company director.

A DRO stays on the credit file for six years and is listed on the Individual Insolvency Register until three months after it ends (GOV.UK: debt relief orders). Northern Ireland has its own scheme with similar limits. Lenders treat a DRO as adverse credit, and some group it with bankruptcy in their criteria.

Income available to service debt divided by the required debt payments over the same period.

Unlike an interest-only coverage measure, debt service may include scheduled capital repayments. The lender defines the income, costs and debt commitments included in its calculation.

Interest withheld from a loan advance to cover an agreed period, reducing the cash released to the borrower.

Also called retained interest, it is different from interest added to the balance as it accrues. The agreement determines the interest calculation, treatment of early repayment and charges if the loan lasts longer than expected.

Under the industry principles drawn up with the Information Commissioner's Office, a lender may file a default once an account is 3 months in arrears, and normally does so by the time it is 6 months in arrears, after giving at least 28 days' notice. Mortgages and other secured loans are an exception and may be defaulted later. A default can also follow a repossession that leaves a balance unpaid, or a debt included in a county court judgment, an IVA or a bankruptcy (Principles for the reporting of arrears, arrangements and defaults).

Paying the debt changes the record to settled, or partially settled where the creditor accepts less than the full balance, but the default still stays for six years from the original default date. Lenders treat a default as adverse credit and look at its age, size, status and type of account. A default on a mortgage or secured loan counts for much more than one on a phone or utility account.

The loan agreement states when default interest starts, the rate and how it is calculated. On a bridging loan a common trigger is the term ending without repayment, so default interest adds to the redemption figure that a sale, a refinance or a re-bridge has to cover. Agreeing an extension or completing a refinance before the end date avoids it.

For a regulated mortgage, the FCA's rules on charges in MCOB 12 apply, including the rule that the contract must not impose excessive charges (FCA Handbook: MCOB 12.5). For unregulated lending the agreement governs, and a solicitor can say whether a default rate in it can be challenged.

The deferred period is the time an income protection policyholder must be off work through illness or injury before the policy starts paying benefit. It is chosen when the policy is set up, from the options the insurer offers, such as 4, 8, 13, 26 or 52 weeks. A longer deferred period lowers the premium, because the insurer pays later.

Employees can match it to the date their employer's sick pay ends, so the benefit starts when pay stops; Statutory Sick Pay may then be the only pay left for the rest of its 28 weeks. The self-employed have no employer sick pay or Statutory Sick Pay, so their income stops on the first day of absence and the deferred period is the gap their savings must cover. It is not the same as the three waiting days that applied to Statutory Sick Pay before 6 April 2026. See also income protection insurance.

Part XVI lets the Secretary of State designate a class of buildings as defective by reason of their design or construction. The national designations made under the Housing Defects Act 1984 are mostly concrete house types, among them Airey, Cornish Unit, Orlit, Reema Hollow Panel, Unity and Butterley, Wates and Woolaway. BISF and Colt homes are not on the national list.

Lender policies differ: some accept a designated home only after a licensed repair, and some decline designated homes whether repaired or not. Scotland repealed its equivalent regime in 2018. See PRC and non-standard construction mortgages.

A valuation prepared remotely by a valuer using property information and comparable evidence without a site inspection.

It differs from a purely automated estimate because a valuer reviews the evidence. Acceptance depends on the lender and property, and it is not a building survey.

Short-term finance used to refinance a development loan as a project reaches completion or the sales stage.

It can provide time to sell or arrange longer-term borrowing. Eligibility depends on the project’s condition and proposed exit; it does not guarantee a lower rate or a successful sale.

Property finance used to fund a construction or conversion project, with borrowing structured around the project budget and progress.

Funds may be released in stages subject to monitoring and conditions. The lender considers costs, contingency, the expected completed value and how the facility will be repaid.

Inheritance Tax usually has to be paid before the grant, while much of the deceased's money cannot be released until the grant is issued. The Direct Payment Scheme lets that money pay the tax. The personal representatives ask each bank, building society or investment provider, including National Savings and Investments, brokers and wealth managers, to recognise them as personal representatives, get an Inheritance Tax payment reference number from HMRC, send form IHT423 to each provider and send the IHT400 to HMRC. The provider then pays some or all of the tax.

In England and Wales HMRC then sends the code needed for the probate application; in Scotland and Northern Ireland it stamps and returns form C1 or IHT421. The scheme uses the deceased's own money rather than borrowing, but each provider handles it in its own way and some are not part of it. GOV.UK: pay from the deceased's accounts.

Any balance at the end of the financial year goes on the company's balance sheet. The account is overdrawn when the director owes the company and in credit when the company owes the director (GOV.UK: directors loans). A loan of more than £10,000 at any time in the year is treated as a benefit in kind, and an overdrawn balance not repaid within 9 months of the end of the accounting period leads to a corporation tax charge at the dividend upper rate for the tax year in which the loan was made (Corporation Tax Act 2010, section 455), which is 35.75% for loans made from 6 April 2026.

Mortgage lenders read the account from the company's accounts. Some treat an overdrawn balance as income the director has already taken and others as a debt, and a credit balance can support an application based on retained profit.

National planning policy for England defines discounted market sales housing as housing sold at a discount of at least 20% below local market value, with eligibility set with regard to local incomes and local house prices, and provisions in place so that it remains at a discount for future eligible households (GOV.UK: National Planning Policy Framework glossary). The percentage is fixed for each development and applied to the market value at each sale, so the owner never holds the discount as equity.

The buyer owns the whole home and pays no rent, unlike shared ownership. Lenders that accept these homes lend on the discounted price and read the section 106 agreement, especially its mortgagee in possession clause. First Homes are a specific kind of discounted market sale housing with a minimum discount of 30%.

A company may only make a distribution, such as a dividend, out of profits available for the purpose. Those are its accumulated, realised profits, so far as not already distributed or capitalised, less its accumulated, realised losses, so far as not written off in a reduction or reorganisation of capital (Companies Act 2006, section 830). Whether a dividend is covered is judged on the company's last annual accounts, or on interim or initial accounts where the law allows (Companies Act 2006, section 836).

Distributable reserves build up as a company keeps retained profit year after year, and losses from earlier years reduce them. A company can therefore make a profit in its latest year and still have little or nothing it can pay out. Mortgage lenders that count a director's share of net profit may look at the reserves on the balance sheet, alongside the company's cash, before counting profit that was never paid out as dividends.

A company may only pay a dividend out of profits available for distribution: its accumulated, realised profits less its accumulated, realised losses (Companies Act 2006, section 830). The directors declare it and the company records each payment on a dividend voucher. Dividends are not a business cost for corporation tax, so they come out of profit after tax.

For the 2026 to 2027 tax year the first £500 of a shareholder's dividends is covered by the dividend allowance, and dividends above it are taxed at 10.75%, 35.75% or 39.35% depending on the shareholder's income band, at the same rates across the UK (GOV.UK: tax on dividends). A lender reading salary and dividends counts the dividends paid in the tax year before personal tax, from the HMRC tax calculation. A lender reading share of net profit works from the company's profit instead, so it also counts retained profit that was never paid out.

Short-term property finance used to meet a financial settlement before an agreed sale or remortgage can complete.

A settlement deadline can arrive before a sale or remortgage is ready. If a sole-name mortgage is the exit, the remaining borrower must be able to support the full bridge redemption figure.

Read about divorce settlement bridging loans.

A lender lends against its own valuer's figure, not the price agreed with the seller. On an ordinary purchase lenders work from the lower of the price and the valuation, so a valuation below the price leaves a gap the buyer must fill with a larger deposit, a renegotiated price or a smaller loan.

A down valuation is different from a decline: the property is still acceptable security, but at the lower figure. See mortgage valuation.

The release of some or all of the money available under a loan facility.

A development facility may have several drawdowns tied to progress and monitoring. An ordinary mortgage may have one release at completion. Conditions, interest and any charges on undrawn funds depend on the agreement.

Universal Credit can include an amount towards housing costs, such as rent to a private landlord, and Housing Benefit is being replaced by Universal Credit. Lenders' buy-to-let and HMO criteria differ on whether they accept tenants who receive these benefits. See DSS HMO mortgages and social housing mortgages. GOV.UK: housing and Universal Credit.

A contractual charge that can apply when a borrower repays all or part of a mortgage before a specified date.

The offer states when it applies, how it is calculated and any overpayment allowance. The charge may be distinct from an administration or exit fee, so check the redemption figure for the intended repayment date.

Removing the non-cash charges for depreciation and amortisation moves the figure closer to the cash a business generates. HMRC notes it is frequently used in commercial loan agreements to measure a borrower's performance year on year. For a trading property such as a hotel, care home or pub, it can be the income figure behind the debt service coverage ratio and the going concern valuation. HMRC Corporate Finance Manual.

Councils send the full electoral register to the credit reference agencies, which may use it to check applications for credit. Opting out of the open register, the version anyone can buy, does not remove a person from the full register (GOV.UK: the open register). The ICO says that someone entitled to vote but not registered may find it difficult to get credit.

Experian says a new registration should appear on its report within 30 days, except that one made during the annual canvass, which it says usually runs from August to November, shows from 1 December (Experian: the electoral roll and your credit score). In Northern Ireland registration is with the Electoral Office for Northern Ireland and there is no annual canvass. A person who is not eligible to register can add a statement to their credit file explaining why, and lenders can then confirm the address in other ways.

In England and Wales a domestic private rented property must meet a minimum EPC rating set by regulations before it can be let, unless a valid exemption is registered; GOV.UK's landlord guidance gives the standard in force. The government has said it aims to raise the standard, which would need new regulations.

GOV.UK: Energy Performance Certificates.

The value of a property less the outstanding debt secured against it.

Equity changes as the property value or secured borrowing changes. It is not the same as cash available to withdraw: lending limits, costs and repayment requirements affect what can be released. Negative equity means secured debt exceeds the property value.

Equity release covers two products. A lifetime mortgage is a loan secured on the home that is usually not repaid in full until the last borrower dies or moves permanently into long-term care. A home reversion plan sells part or all of the home to a provider, which receives its share when the home is sold. Both are regulated by the Financial Conduct Authority, which sets advice and disclosure rules for them in MCOB 8 and MCOB 9, and advising on either needs an appropriate equity release qualification.

The Equity Release Council, the trade body for the sector, sets product standards for plans that meet them, including a no negative equity guarantee and the requirement for independent legal advice. A retirement interest-only mortgage is a later-life mortgage too, but it is assessed under the standard mortgage rules rather than as equity release.

A signed form covers the whole building for five years. RICS guidance says not every building needs one: whether a valuer asks for it depends on criteria such as the building's height and the type and extent of cladding, and some lenders accept other evidence, such as a fire risk appraisal of the external wall (FRAEW). RICS expects the need for EWS1 forms to fall away as those appraisals are completed.

See mortgages for leasehold flats and the Building Safety Act 2022. RICS: EWS FAQs.

The key difference from a standard mortgage application is not the borrower’s circumstances but the property itself. Lenders want reassurance that the building is of standard construction, that the freeholder (often still the local council) manages the block appropriately, and that enough of the block is now privately owned rather than retained as council or housing association stock.

Lenders weigh these points differently, so a flat one lender declines can be acceptable to another; the lender's criteria are checked against the specific building and block.

Before exchange, an offer to buy a home in England and Wales is not legally binding, and either side can withdraw. At exchange each side's conveyancer sends the other the signed contract, and from then on neither side can usually pull out without paying compensation (GOV.UK: buying a home, transferring ownership). The contract fixes the completion date, when the rest of the price is paid and ownership passes. Under the Law Society's Standard Conditions of Sale the buyer pays a deposit of 10% of the price at exchange unless the contract says otherwise, and the property is at the buyer's risk from the date of the contract.

A lender's mortgage offer is not part of the purchase contract, so a buyer whose offer is withdrawn after exchange is still bound to complete. In Scotland the binding point is the conclusion of missives; in Northern Ireland, as in England and Wales, it is the exchange of contracts.

Executive income protection is an income protection policy that a company takes out and pays for to cover a director or employee. The company owns the policy and pays the premium, and whether the premium is deductible for the company depends on HMRC's test of whether the insurance is taken out for the purposes of the trade. If the insured person cannot work because of illness or injury, the insurer pays the benefit to the company after the deferred period, and the company pays it to the person through PAYE, where it is taxed as earnings (HMRC manual: EIM06410).

It differs from a personal income protection policy, whose benefit is free of income tax, and from key person insurance, which pays the company for the loss of profits that a key person's absence or death causes.

On a residential mortgage it is usually an administration fee for closing the account; the regulator calls it a mortgage exit administration fee and expects it to reflect the administrative cost. On bridging and development loans an exit fee can instead be a percentage of the loan or of the gross development value, set out in the facility agreement. Compare it with the early repayment charge and other fees when weighing the total cost.

An exit strategy is the planned way a loan, most often a short-term loan such as a bridging loan, will be repaid. The usual exits are a sale of the property or a remortgage onto a longer-term mortgage, and money from another identifiable source, such as the sale of another asset, can also repay it. A lender assesses the evidence for the exit, its timing and whether it will cover everything owed at the end of the term.

A refinance exit has to meet the future lender's criteria, including its valuation, its rent or income test and any six-month rule on ownership, so check it with that lender before the bridge completes. For a regulated bridging loan, the FCA requires the lender to have evidence of a clearly understood and credible repayment strategy, and its guidance says a lender should not accept a refinance exit unless it is reasonably satisfied that a mainstream lender will be willing to lend (FCA Handbook, MCOB 11.6.41R and 11.6.54G).

An expat mortgage is a specialist UK mortgage designed for British nationals who are living and working overseas but wish to buy, refinance, or retain property in the United Kingdom. These products exist because most standard UK residential and buy-to-let lenders restrict lending to borrowers who are resident and paid in the UK.

Expat mortgages are underwritten to accommodate overseas income, foreign currency earnings, international tax arrangements, and non-UK residency. As a result, they are typically provided by specialist lenders or private banks and involve enhanced due diligence, particularly around income verification and AML compliance. Deposits are often higher and pricing can be slightly above equivalent UK resident products to reflect the additional risk.

An expat mortgage can be used across a broad range of property and asset types. This includes standard residential property, buy-to-let, houses in multiple occupation (HMO), serviced accommodation (SA), holiday lets, semi-commercial property, and fully commercial assets. Lender appetite will vary depending on the asset class, location, tenancy structure, and the borrower’s country of residence.

Expat mortgages can be arranged in a personal name or via a UK limited company, depending on the borrower’s objectives and lender policy. Some lenders will also consider more complex ownership structures, including portfolio landlords and mixed-use investments, where the underlying income and risk profile is acceptable.

An expat mortgage is a flexible, specialist lending solution that enables UK nationals living overseas to invest in, own, or refinance UK property across residential, investment, and commercial sectors where standard mortgage products are not suitable.

Family assistance takes several forms: savings held by the lender as security for a period, a charge over the helper's own property, a guarantee, a gifted deposit, or income used for affordability under a joint borrower sole proprietor arrangement.

In each case the helper stays off the title, so the purchase does not attract the additional dwelling surcharge on their account.

Where savings are held as security they are released once the loan falls below an agreed loan-to-value. Interest paid on them, where any is paid, is taxable in the helper's hands.

Family buy to let covers buying or remortgaging a property that the borrower's spouse, civil partner or partner, parent, brother, sister, child, grandparent or grandchild will live in. Each of them is a related person, so the buy to let exclusions in the Regulated Activities Order do not apply and the loan is a regulated mortgage contract (legislation.gov.uk: Regulated Activities Order, article 61A). It is one of the two kinds of regulated buy to let; the other is consumer buy to let, for a borrower who lets to a tenant but not as a business.

The lender assesses affordability on the borrower's income and committed expenditure under MCOB, including the borrower's own mortgage, rather than with a rental stress test. Lenders differ on whether the relative must pay rent and on whether they count it, and not every buy to let lender offers family buy to let. The mortgage counts against the borrower's own affordability, and a buyer who already owns a home usually pays the higher rates of Stamp Duty Land Tax in England and Northern Ireland, the higher rates of Land Transaction Tax in Wales or the Additional Dwelling Supplement in Scotland.

Family income benefit is a form of term life insurance. The policyholder chooses an income, usually monthly, and a term, often running until the youngest child is expected to be independent. If the person insured dies during the term, the insurer pays that income from the claim until the end of the term, so a claim early in the term pays for many years and a claim late in the term for few. Because the number of payments left falls each year, the most the insurer could pay falls too. The income can be level or rise each year with inflation, and some policies add critical illness cover.

HMRC treats the payments as a series of capital sums paid on death rather than as income (HMRC Insurance Policyholder Taxation Manual: IPTM8080). A policy written in trust pays the trustees for the beneficiaries, while one that pays the estate can count towards it for Inheritance Tax. It is a pure protection policy with no cash-in value, and advising on and arranging it is insurance distribution regulated by the FCA under ICOBS.

Since 6 April 2020, an individual who lets residential property cannot deduct mortgage interest and other finance costs, such as fees for taking out or repaying a mortgage, in working out the rental profit. Instead the landlord gets a reduction in their Income Tax bill equal to 20% of the lowest of the finance costs, the property profit and their income above the personal allowance, and unused costs carry forward (GOV.UK: restricting finance cost relief for individual landlords). It is often called Section 24, after the section of the Finance (No. 2) Act 2015 that introduced it.

A higher-rate taxpayer therefore gets relief at less than their own rate, which is why buy to let lenders commonly ask higher-rate taxpayers for more rent cover under the interest coverage ratio test. Companies are not affected and deduct interest in working out their profit for Corporation Tax (HMRC Property Income Manual: PIM2054). From 2027 to 2028 the reduction is due to be given at the 22% property basic rate.

A joint account, a joint loan or mortgage, or a joint application for credit links the two people's files at the credit reference agencies. A lender searching one file can then see financial information in the associate's name, so one person's adverse credit can affect the other's application. The ICO says you should not be linked to anyone just because you live at the same address (ICO: credit).

The link stays for as long as the agencies believe the two people are financially connected. Once the joint account has closed and finances are separate, either person can write to each agency asking for a disassociation, sometimes called a notice of disassociation, so the files are no longer linked. Each agency holds its own record, so the request goes to each one.

The FCA's role and objectives are set mainly by the Financial Services and Markets Act 2000. It authorises firms, supervises them after authorisation and writes the rules they follow; its rules for regulated mortgage business are in MCOB. It took over from the Financial Services Authority in 2013.

Not all property finance is FCA-regulated. A loan is a regulated mortgage only where the statutory test is met, broadly lending secured on a home the borrower or a close relative lives in. Lending to a company or investor for buy-to-let, commercial or development purposes is generally outside it, and consumer buy-to-let has its own framework. FCA: about the FCA.

The Financial Ombudsman Service was set up by Parliament in 2001 as a statutory dispute resolution scheme under the Financial Services and Markets Act 2000. It is free for consumers and offers an informal alternative to the courts for complaints about financial businesses, including mortgage lenders and brokers (Financial Ombudsman Service: who we are).

A complaint goes to the business first. For most complaints the business has up to eight weeks to respond, and the customer then has six months from the date of the final response to bring the complaint to the ombudsman. If the ombudsman decides a complaint and the customer accepts the decision, it is binding on the business and the customer and final (Financial Services and Markets Act 2000, section 228). The ombudsman settles individual disputes; the rules that firms follow are set by the Financial Conduct Authority.

A restriction on the title keeps the discount, as a percentage of market value at the time, with the home at each sale, so the owner cannot keep the discount as equity. Whether First Homes are offered depends on local delivery. Scotland's First Homes Fund is a separate shared equity scheme. GOV.UK: First Homes.

The stake is the contribution as a percentage of the home's value or price, whichever is lower, so £10,000 towards a £200,000 home is a 5% stake. No interest or monthly payment is charged on it. The buyer can buy back the stake in steps of 5% or more, and on a sale the government receives its percentage of the sale price or the current value, whichever is higher.

The buyer needs a repayment mortgage covering at least 25% of the price, applies after the offer is accepted, and must live in the home as their only residence. The fund cannot be combined with LIFT or another scheme that helps a buyer purchase a home (mygov.scot: First Homes Fund). The scheme is separate from England's First Homes and from the earlier First Home Fund, which ran from December 2019 to March 2022 (gov.scot: First Homes Fund, how to apply).

A fixed rate holds the interest rate, and so the payment, for a set period regardless of what Bank Rate does. Fixed rates are priced off the swap market rather than off Bank Rate directly.

Leaving before the end of the fixed period usually triggers an early repayment charge, commonly stepping down each year of the term.

For a regulated mortgage, MCOB 11.6.18R requires the lender to consider likely future interest rates over at least five years when assessing affordability, unless the rate is fixed for five years or more. That can mean a larger loan on a five-year fix than the same borrower would be offered on a shorter fix.

A fixed term contract is employment, and most lenders treat it as such provided either a minimum period remains on the current contract or the borrower can show a history of renewals with the same employer.

This is distinct from day-rate contracting, which is assessed on the annualised rate rather than on a salary.

Probation, a first contract with no renewal history, and gaps between contracts are the points on which lender policy differs most.

A flat above commercial premises is a home in a building where another part, usually the ground floor, is used for a business such as a shop, office, cafe, takeaway or pub. The flat can be bought and mortgaged on its own, on a residential mortgage or a buy to let mortgage, or with the commercial unit as one building on a semi-commercial mortgage.

Lenders set their own criteria for these flats. They look at what the business is and its trading hours, cooking and extraction, how the flat is reached and whether it has its own entrance, the fire separation between the two uses, the lease, and the valuer's view of saleability. In England a change of use within Class E, such as a shop becoming a cafe, needs no planning permission, while a hot food takeaway or a pub is sui generis and a change to it generally needs permission (legislation.gov.uk: Use Classes Order, Schedule 2).

A UK mortgage application by a borrower who is not a UK national.

Eligibility depends on the lender’s criteria for residency, immigration status, income and the property. Nationality alone does not determine approval, and overseas residents may need different products from UK residents.

The term comes up in commercial, social housing and care leases. Where a lender finances let property, the lease terms, including who repairs and insures, form part of the income assessment. Valuation Office Agency glossary (GOV.UK).

A further advance increases the borrowing under an existing mortgage without changing lender. The lender assesses it much as it would a new loan: it checks affordability on the total borrowing, may revalue the property and decides whether it accepts the purpose, such as home improvements. On a home, a further advance varies a regulated mortgage contract by adding borrowing, so the FCA's affordability rules apply to it, unlike a product switch with no extra borrowing (FCA Handbook: MCOB 11.6).

Lenders usually set the extra borrowing up as a separate part, or sub-account, with its own product, rate and term, so the existing deal carries on and no early repayment charge arises on it. The alternatives are a remortgage of the whole balance to a new lender and a second charge mortgage from a different lender; a product transfer changes the deal without borrowing more.

Under section 102 of the Finance Act 1986, property given away is subject to a reservation while the person receiving it has not taken possession and enjoyment of it, or the giver is not excluded, or virtually excluded, from benefiting from it. If the reservation still exists when the giver dies, the property is treated as part of their estate. If it ends earlier, for example because the giver moves out, the giver is treated as making a potentially exempt transfer at that time, and the seven years run from then (Finance Act 1986, section 102). The usual example is a parent who gives a home to a child and carries on living there.

A sale below value is partly a gift. HMRC treats the undervalue as the property given, so if the seller in a concessionary purchase keeps living in the home, that share of its value can stay in their estate for Inheritance Tax (HMRC: IHTM14316). Occupation paid for at full value, such as a full market rent, is not treated as a reservation.

A gifted deposit is money given towards a buyer's deposit by a parent, another relative or, with some lenders, a friend, on terms that it is not repaid, carries no interest and gives the giver no share in the property. Lenders ask the giver to sign a gift letter or the lender's own form saying so. Money that has to be repaid is a loan, which a lender may refuse as the deposit or count as a commitment. The conveyancer, who usually acts for the lender as well, tells the lender about the gift where the lender's instructions require it.

The conveyancer also checks the giver's identity and where the money came from under the anti-money laundering rules. A giver who will live in the home usually signs an occupier's waiver putting any claim behind the lender's charge. For the giver, the gift is normally a potentially exempt transfer for Inheritance Tax, exempt if they live for seven years. See family assisted mortgages.

RICS valuation standards call these trade related properties: buildings designed or adapted for a specific business, whose value reflects the trading potential of that business. They are valued as a fully equipped operational entity, which assumes a sale or letting together with the trade inventory and the licences needed to keep trading, so the accounts and the market's view of the trading potential drive the figure. The figure is commonly reached by the profits method, from the operating profit a reasonably efficient operator could earn there.

A lender may also ask the valuer for a figure on the special assumption that trade has ceased. See vacant possession and hotel mortgages.

In England and Wales the Probate Registry issues a grant of representation: a grant of probate where an executor named in a will applies, or letters of administration where there is no will or no executor can act. With it the personal representatives can collect the assets, sell property and investments, pay debts and distribute the estate. Where Inheritance Tax is due they send form IHT400 to HMRC and usually pay part of the tax before applying, and HMRC sends a code the application needs. The fee is £526 for an estate over £5,000, as at October 2026 (GOV.UK: probate fees).

In England and Wales, HM Land Registry will not register a disposition by an executor until probate is granted, so a loan secured on estate property normally waits for the grant. In Scotland the sheriff court grants confirmation on an inventory of the estate in form C1, and in Northern Ireland the Probate Office of the High Court issues grants.

Gross development value is the valuer’s view of what a scheme will be worth on completion, in line with the approved plans and specification. It is the denominator for the loan to gross development value ratio that caps a development facility.

It is assessed on comparable evidence for the finished units, not on the developer’s appraisal. Where the two differ, the lender’s figure governs the facility, which can move the equity requirement significantly late in an application.

A development is also tested against loan to cost, and the binding constraint is whichever of the two produces the smaller facility.

The loan amount before deductions such as retained interest or fees, using the basis stated in the lender’s offer.

It may include financed costs as well as money released to the borrower. Terminology varies, so distinguish the total facility, drawn balance, net advance and amount used for the LTV calculation.

Ground rent is not defined in law in England and Wales; it is the name for the rent a long residential lease reserves to the landlord. The Leasehold Reform (Ground Rent) Act 2022 limits the ground rent on most new long residential leases to a peppercorn. Leases granted before the Act took effect, and existing leases bought from another leaseholder, keep the ground rent the lease sets.

Lenders set their own limits on the level of ground rent, how it rises (fixed steps, increases linked to the RPI or doubling at intervals) and how often it is reviewed, so an onerous ground rent can make a flat harder to mortgage even on a long lease. See mortgages for leasehold flats.

Guaranteed acceptance plans are usually for people aged 50 to 85. The premium is fixed and cannot be increased, and the plan pays a fixed lump sum on death that does not keep up with rising prices. Plans set a waiting period before full cover starts, and apart from the 30-day period to cancel after buying the plan (FCA Handbook: ICOBS 7.1), money comes back only through a claim. Someone who starts a plan in their 50s and lives to 80 or above can pay in much more than the plan pays out, and MoneyHelper suggests comparing ordinary life insurance first, since lots of health conditions are accepted on ordinary policies (MoneyHelper: life insurance for over 50s).

The plans can suit people who cannot get individually underwritten cover, for example after a decline following insurance underwriting. The sum is chosen at the start and is not linked to a mortgage balance.

A loan secured against property in the Bailiwick of Guernsey under the applicable local property and lending rules.

The security process and lender requirements differ from mainland UK lending. The Guernsey lending framework includes regulated home-finance agreements and exemptions; the status of the particular agreement must be checked.

Sources: GFSC: lending, credit and finance.

Property finance for premises used to operate a guest house or bed-and-breakfast business.

The lender considers guest accommodation, any owner’s living accommodation and the business income. The balance between home and business use affects the appropriate finance structure.

A Help to Buy equity loan funds part of a new-build purchase alongside a repayment mortgage. It is secured by a second charge and is repaid as the same percentage of the property's value at the time of repayment, not as the cash originally advanced.

England's scheme and the Help to Buy (Scotland) schemes are closed to new applications, so for existing English loans the questions are interest from year six, repaying all or part of the loan, and remortgaging with it in place. Help to Buy Wales is a separate scheme with its own eligibility rules and application deadline, set by the Welsh Government.

Whether the administrator's permission is needed depends on the change. In England, moving to a new lender with the loan kept, or borrowing more, needs permission, but a rate switch with the current lender and no extra borrowing needs no application, and repaying in full needs no permission. In Wales, moving to a new mortgage lender with the loan kept also needs the scheme's consent; for a rate switch with the current lender and no extra borrowing, confirm with Help to Buy (Wales) Ltd whether consent is needed. Repayment uses a RICS valuation by an independent valuer who meets the scheme's criteria, arranged and paid for by the homeowner.

A mortgage arranged for a borrower with substantial income or assets, often involving an individual assessment of their financial position.

The marketing term does not itself establish eligibility for the FCA’s high-net-worth mortgage provisions. Any use of those provisions depends on the regulatory definition and conditions, and does not remove the need for a credible repayment assessment.

Sources: FCA: mortgage perimeter guidance.

HMRC records are common income evidence in a mortgage application: tax calculations and tax year overviews for the self-employed, and pay and tax records under PAYE for employees. It collects Stamp Duty Land Tax in England and Northern Ireland; Scotland and Wales have their own property taxes, collected by Revenue Scotland and the Welsh Revenue Authority. GOV.UK: HM Revenue and Customs.

Short-term funding to buy, convert or improve an HMO before refinancing or selling it.

The exit lender’s licensing, planning, rental-cover and valuation requirements should be checked before the bridge completes. Investment value is not accepted by every lender.

Read about bridging loans for hmos.

In England mandatory licensing under Part 2 of the Housing Act 2004 covers HMOs occupied by five or more people forming two or more households. In Wales the mandatory test also requires the building to have three or more storeys. In both nations a council can designate an area for additional licensing, which brings other HMOs into the scheme.

In Scotland every HMO needs a licence from the council under Part 5 of the Housing (Scotland) Act 2006: a property is an HMO when it is the only or main residence of three or more people from three or more families. Licensing of other rented homes in a designated area is selective licensing. GOV.UK: HMO licences.

A mortgage for a property let as a house in multiple occupation, subject to the lender’s HMO criteria.

A lender considers the number of occupants, tenancy arrangements, rental income, property layout and any licensing or planning requirements. Its product criteria do not replace the legal test for an HMO.

Sources: GOV.UK: houses in multiple occupation.

A holiday let mortgage is a specialist form of property finance designed for properties that are let on a short-term basis to holidaymakers, rather than to long-term residential tenants. These mortgages are specifically structured around the seasonal and nightly income generated by holiday accommodation and sit in a different risk category to standard buy-to-let lending.

Holiday let mortgages can be used for properties located in major towns and cities, as well as, more commonly, in areas with strong and proven tourism demand. While coastal, rural, and lifestyle destinations remain the core of this market, many lenders will also consider city-based holiday lets where there is clear non-corporate short-stay demand from leisure travellers.

It is important to distinguish holiday let mortgages from Airbnb mortgages. Most lenders in this space do not lend purely on short-term corporate or transient accommodation models. Instead, they typically require evidence of sustained leisure demand, such as holidaymakers booking weekend or weekly stays, rather than contractor or business use.

The Home Report was introduced in Scotland on 1 December 2008 under Part 3 of the Housing (Scotland) Act 2006. The single survey is carried out by a surveyor registered with or authorised by the Royal Institution of Chartered Surveyors and gives condition ratings and an opinion of value. The energy report contains the property's Energy Performance Certificate, and the seller completes the property questionnaire. The survey and energy report must date from no earlier than 12 weeks before the home goes on the market. A seller must give a copy within nine days to a buyer who asks, and can refuse only if they doubt the buyer is serious or can afford the home, or would prefer not to sell to them, never for an unlawful discriminatory reason.

The surveyor can also prepare a mortgage valuation report for lenders. Some lenders accept the Home Report valuation in that form and others instruct their own mortgage valuation, so lender policy varies. New homes sold to the first occupier, newly converted homes and some other properties are exempt, although the seller must still provide an Energy Performance Certificate. mygov.scot: Home Report.

A home reversion plan is a form of equity release. The provider buys a share of the home, taking the seller's age and health into account, and pays a percentage of the full market value of that share. The seller keeps the right to live in the home, and the provider receives its share of the proceeds when the home is eventually sold.

The seller no longer owns the share sold, so they do not benefit from any rise in its value and cannot leave it to anyone. Entering into a plan is a regulated activity where the seller, or a related person, is entitled to occupy at least 40% of the property as a dwelling (legislation.gov.uk: Regulated Activities Order, article 63B). Minimum ages are set by each provider.

A hotel bridging loan is a bridging loan whose security is a hotel, whether trading or closed, or a guest house. Because the property's value depends on its trade, the lender's valuer reports a trading value under the profits method and a figure on the assumption that trade has ceased, and the lender decides which one the loan is based on. The interest is retained or rolled up, or sometimes paid monthly, and the loan is repaid from the exit: a hotel mortgage once the hotel's accounts support one, a sale of the hotel, or the sale or refinance of converted units.

Most hotel bridging loans are unregulated business lending. A loan to an individual or trustees is normally a regulated mortgage contract where at least 40% of the property is used as a dwelling by the borrower (or, for trustees, a beneficiary of the trust) or a related person, as can happen in a small guest house (Regulated Activities Order, article 61 and article 61A).

A commercial mortgage secured against hotel premises, used to purchase or refinance the property.

For an owner-operated hotel, the lender considers the trading business as well as the property. Where a separate operator rents the building, the lease and rental income form part of the assessment.

A closed hotel, or one that needs work before its trading can support a mortgage, can be bought with a hotel bridging loan that a hotel mortgage later repays.

A house in multiple occupation generally houses at least three people from more than one household who share facilities such as a kitchen or bathroom.

The precise legal definition and licensing rules depend on the UK nation and local authority. Licensing requirements are separate from planning permission and a lender’s own HMO product criteria.

Sources: GOV.UK: houses in multiple occupation.

Many shared ownership homes are sold by housing associations, and in England an eligible tenant may be able to buy their home under the Right to Acquire. Some social housing cases involve leasing a property to a housing association. In Scotland they are regulated by the Scottish Housing Regulator, and in Wales they are registered with and regulated by the Welsh Ministers. GOV.UK: housing association homes.

An income payments agreement is made between the bankrupt and the trustee or the official receiver where the bankrupt's income is more than they need for reasonable domestic needs. It sets the amount and the period, which may run past discharge but cannot end more than three years after the agreement is made (Insolvency Act 1986, section 310A). Where no agreement is reached, the court can make an income payments order to the same effect.

The payments must continue until the agreement ends, even after the bankruptcy itself has ended. A mortgage lender counts them as a commitment when it assesses affordability, so they reduce the amount it will lend on income while they run.

Income protection insurance, also called permanent health insurance, replaces part of your income if illness or injury stops you working. It pays a monthly benefit after a deferred period chosen at the start, and keeps paying until you return to work, the benefit period ends or the policy ends. The benefit is a proportion of earnings, up to a maximum each insurer sets. Policies differ in the occupation test they use, such as own occupation, and in whether the benefit period is full term or limited for each claim.

It is a pure protection contract with no cash-in value, and advising on or arranging it is insurance distribution regulated by the Financial Conduct Authority under its Insurance: Conduct of Business sourcebook (ICOBS). Benefit from a personal policy you pay for yourself is free of income tax (legislation.gov.uk: ITTOIA 2005, section 735); benefit from a policy an employer pays for is taxed as earnings. It differs from critical illness cover, which pays a lump sum on diagnosis of a listed condition whether or not you can work.

Under section 162 of the Taxation of Chargeable Gains Act 1992, when a person who is not a company transfers a business to a company as a going concern, with all its assets or all of them other than cash, wholly or partly in exchange for shares, the gain is deducted from the cost of the shares and taxed when the shares are disposed of. For transfers on or after 6 April 2026 the relief has to be claimed (HMRC Capital Gains Manual: CG65700).

Landlords moving a portfolio into a company need to know whether their letting is a business. HMRC treats that as a question of fact, looking at the overall level of activity, and accepts a business where an individual spends 20 hours or more a week on business-type activities (HMRC Capital Gains Manual: CG65715). The relief covers capital gains tax only: Stamp Duty Land Tax on the transfer is worked out separately. A tax adviser should confirm whether it applies.

Lenders that assess foreign national applicants look at immigration status, including whether the applicant holds ILR or a time-limited visa. GOV.UK: indefinite leave to remain.

The register lists bankruptcies, debt relief orders and individual voluntary arrangements that are current or ended in the last three months, together with current bankruptcy restrictions orders and undertakings. A bankruptcy entry is removed three months after discharge, and a restrictions order or undertaking when it expires (Insolvency Service: the Individual Insolvency Register). Anyone can search it free.

The register is separate from the credit file: a bankruptcy can stay on the credit file for six years from the order after it has left the register. Scotland keeps its own Register of Insolvencies, run by the Accountant in Bankruptcy, and Northern Ireland keeps separate registers for its bankruptcies, debt relief orders and IVAs.

The insolvency practitioner works out what the debtor can afford and how long the arrangement lasts. In England and Wales it starts once creditors holding three-quarters or more by value of the debts of those who respond vote for it, and the unsecured debts included in it are released when it completes. IVAs are available in England, Wales and Northern Ireland; in Scotland the comparable route is a trust deed, which can become a protected trust deed. Secured debts such as a mortgage sit outside the arrangement and continue to be paid.

Consumer IVAs can be proposed under the Insolvency Service's IVA Protocol, a standard framework that practitioners and creditors agree to follow. Under the 2025 version, which must be used for protocol IVAs proposed from 1 July 2025, the family home is excluded: the IVA runs for 60 months, or 72 months where the debtor's share of 85% of the home's value less secured borrowing is £10,000 or more (IVA Protocol 2025). In England and Wales an IVA is listed on the Individual Insolvency Register until three months after it ends, and Northern Ireland keeps its own IVA register; an IVA stays on the credit file for six years from its start. Lenders treat a current or past IVA as adverse credit, and their rules on how recent it is differ. GOV.UK: individual voluntary arrangements.

Inheritance Tax is paid from the estate by the personal representatives. The nil-rate band is £325,000, and the residence nil-rate band adds up to £175,000 where a home, or a share of one, goes to children or grandchildren. The residence band tapers away by £1 for every £2 that the estate is worth over £2 million. Unused bands can pass to a surviving spouse or civil partner, and both bands and the taper threshold are frozen until 5 April 2031. The rate is 40%, or 36% on some assets where 10% or more of the net estate goes to charity, and what passes to a spouse, civil partner or charity is normally exempt.

The tax is due by the end of the sixth month after the death, with interest after that at Bank Rate plus 4 percentage points. The tax on land, buildings and some business assets can be paid in 10 yearly instalments, usually with interest on the unpaid balance, and from 6 April 2027 most unused pension funds will count towards the estate. GOV.UK: how Inheritance Tax works.

In an individual voluntary arrangement, the insolvency practitioner acting as the nominee helps the debtor draft the proposal and puts it to the creditors. Once it is approved, the practitioner acting as the supervisor receives the payments, pays the creditors after deducting fees, and issues the completion certificate at the end (Insolvency Service: IVA Protocol 2025). Under the protocol's standard terms the debtor needs the supervisor's prior written approval for credit of more than £500, so a mortgage or remortgage during an IVA starts with the supervisor.

Insolvency practitioners are licensed and regulated by recognised professional bodies, and only a licensed practitioner can set up an IVA. In Scotland only a licensed insolvency practitioner can arrange a trust deed, and the practitioner then acts as its trustee. GOV.UK: find an insolvency practitioner.

Insurable interest is the financial stake a policyholder must have in the life or event it insures. The Life Assurance Act 1774, which applies in England, Wales, Scotland and Northern Ireland, makes a policy on a life void where the person for whose benefit it is made has no interest in that life, or where it is made by way of gaming or wagering, and provides that no greater sum can be recovered than the value of the interest (legislation.gov.uk: Life Assurance Act 1774).

For key person insurance, the business's interest is the money it would lose if the person died, such as lost profit, the cost of a replacement or a loan the person supports. That is why insurers ask a business for accounts and details of the person's role, and limit the sum assured to what the evidence supports.

An insurance-backed guarantee has two parts: the contractor's own guarantee to come back and put right a covered problem during the guarantee period, and a separate insurance policy that keeps that cover valid if the contractor becomes insolvent or ceases to trade.

For Japanese knotweed, the RICS professional standard expects a management plan to carry a guarantee of at least 5 years after the remediation contract is complete, with third-party insurance behind it, and expects most lenders to want one at management categories A and B. The PCA code of practice says knotweed guarantees most commonly cover 5 or 10 years. The guarantee should be transferable to later owners. The minimum term and the evidence a lender accepts are set by each lender.

Insurance underwriting looks at the person to be insured: health and medical history, lifestyle and smoking, occupation, hazardous pursuits and travel. The insurer uses the answers on the application and, where it asks, a report from the applicant's GP or specialist. It ends in one of five decisions: standard terms; an increased premium, called a premium loading; an exclusion, which removes claims from a specified cause; a postponement until a set time has passed or results are known; or a decline. Criteria and approaches vary between insurers, so the same facts can lead to different decisions (MoneyHelper: buying insurance if you are ill or disabled).

In England, Wales and Scotland the Equality Act 2010 allows an insurer to treat a disabled applicant differently only by reference to relevant information from a source on which it is reasonable to rely. Insurance underwriting is separate from a lender's underwriting of a mortgage application, which assesses the borrower, the property and the loan.

Income divided by interest costs over the same period, often expressed as a percentage in buy-to-let lending.

In buy to let, the Prudential Regulation Authority defines it as the expected monthly rent divided by the monthly mortgage interest at a stressed rate that allows for likely rate rises, and describes 125% as the current industry minimum (Bank of England: SS13/16). Lenders are also expected to allow for the tax on the property, so some ask higher-rate taxpayers for more cover than basic-rate taxpayers or companies. The required ratio, the stress rate, the rent the lender accepts and other borrowing limits vary by lender, and the result is only one of the limits on the loan. See also rental stress test and top slicing.

A mortgage where regular payments cover interest, while the capital remains due at the end of the term.

The borrower needs a repayment strategy acceptable to the lender. Making the interest payments does not reduce the original borrowing.

Sources: MoneyHelper: mortgage repayment options.

A property valuation that considers the income the property can generate and the return required by market participants.

Rent, operating assumptions, lease terms and an appropriate yield influence the result. A lender may commission another valuation basis, so rental income alone does not establish the amount it will lend.

Lenders and valuers often call an income-based valuation an MV1 (market value 1) valuation. The label is used loosely, so the lender's valuation instruction states the basis it wants.

The rules apply where a worker provides services to a client through their own intermediary, usually a personal service company. In most cases the client decides the worker's status and issues a status determination statement; where the client is small and outside the public sector, the contractor's own company decides. If the work is inside IR35, the fee payer deducts income tax and employee National Insurance before paying the contractor's company.

HMRC says the rules are unlikely to apply to someone employed by an umbrella company. IR35 settles who deducts tax, not whether a lender will lend: lenders publish their own rules on how they read a contractor's income. GOV.UK: understanding off-payroll working (IR35).

Japanese knotweed (Reynoutria japonica, formerly Fallopia japonica) is a perennial introduced to the UK in the mid-19th century. It grows tall, hollow, bamboo-like canes that die back in winter, and its rhizomes can lie dormant in the soil for long periods and regrow if disturbed. In England and Wales, planting it or causing it to grow in the wild is an offence under the Wildlife and Countryside Act 1981, and contaminated soil may be controlled waste.

Since 23 March 2022, RICS valuers and surveyors place knotweed at a residential property in a management category under the RICS professional standard: A where it is damaging a structure, B where it affects amenity space such as a garden or driveway, C where it is present without either, and D where it is on adjoining land within 3 metres of the boundary. At A and B most lenders are expected to require a management plan with an insurance-backed guarantee, often with a retention. The categories replaced the 7 metre distance test used since 2012.

A loan secured against property in Jersey under the island’s property law and the lender’s applicable requirements.

Property ownership, registration and borrower eligibility differ from mainland UK arrangements. Check the legal security and regulatory status of the specific lender and agreement rather than assuming UK mortgage rules apply.

A joint borrower sole proprietor mortgage separates liability from ownership. A parent or other supporter is named on the mortgage, so their income counts towards affordability, but not on the title deeds.

Because the supporter takes no beneficial interest, the purchase does not attract the additional dwelling surcharge on their account, and the buyer's first-time buyer relief is preserved where it would otherwise apply.

The supporter is jointly and severally liable for the whole debt, and the mortgage appears on their credit file. Lenders differ on the maximum number of borrowers and on whose age sets the maximum term.

Joint borrowers are jointly and severally liable: each is responsible for the whole mortgage, whoever makes the payments, and the lender can pursue any of them for arrears. If one borrower dies, the others still have to repay the whole debt (MoneyHelper: joint loans).

The lender assesses every borrower's income, commitments and credit file, and the joint account links the borrowers' credit files as a financial association. Who owns the property, and in what shares, is a separate question, settled by how the title is held (as joint tenants or tenants in common in England and Wales), by any declaration of trust and, without one, by what a court finds the owners intended. A borrower can be removed only with the lender's agreement, usually through a transfer of equity or a remortgage, with the remaining borrowers' income assessed alone.

In a joint venture the funder supplies the equity a developer would normally have to find, and is paid out of the scheme's profit rather than through interest on that portion.

The structure is usually a special purpose vehicle owned by both parties, with the profit split, any priority return, and the treatment of cost overruns all set out before drawdown.

It suits a developer with a consented scheme and no equity, or with more schemes than equity. The cost is a share of the profit, so it is compared against conventional funding and mezzanine on what the developer keeps, not on the headline rate.

Key person insurance, also called keyman insurance or key person cover, is usually term life cover, often with critical illness cover, on a founder, director, salesperson or specialist whose loss would cause the business financial harm. The business is the policyholder and the beneficiary; the insured person's family receive nothing from it. The business must have an insurable interest in the person's life, and insurers ask for evidence, such as accounts, that justifies the sum assured.

The sum is usually justified by a multiple of the person's remuneration, their share of gross profit over the time needed to replace them, the cost of recruiting a replacement, or borrowing that depends on them. HMRC treats the premiums as a trading expense where the sole purpose is to meet a loss of trading income and a life policy is term insurance with no other benefits, and a payout on such a policy is then a trading receipt (GOV.UK: HMRC Business Income Manual, BIM45525). It differs from shareholder protection, which pays the remaining owners, and a relevant life policy, which pays an employee's family.

Revenue Scotland manages and collects the tax, and the Scottish Government sets its rates. Buying an additional home, or residential property through a company, usually also brings the Additional Dwelling Supplement. Revenue Scotland: LBTT.

A short-term loan secured against land, used to fund a purchase or release capital before an agreed repayment event.

Planning status, access, permitted use and saleability affect the security assessment. Repayment may depend on a sale or subsequent finance, which must be assessed separately.

Higher residential rates may apply where the buyer already owns one or more residential properties, unless they are replacing their main residence. Wales has no separate first-time buyer relief. Welsh Government: Land Transaction Tax.

Government guidance to councils describes large panel system buildings as built from large precast concrete panels, many between 1963 and 1978. After the 1968 gas explosion and partial collapse at Ronan Point, councils were told to appraise and, where necessary, strengthen such blocks, and later guidance says every LPS building's structural history and condition should be known and monitored.

Many lenders decline LPS; some consider an LPS house with a satisfactory structural engineer's report but not an LPS flat. See mortgages on ex-council flats and non-standard construction mortgages.

A leaseholder owns the right to occupy for the term of the lease. Lenders set a minimum unexpired term, often expressed as a number of years that must remain at the end of the mortgage term, although some lenders set a minimum lease at completion instead, and the figures vary by lender.

A lease below that threshold is not unmortgageable, but it narrows the lender list sharply and can push the case towards a lease extension before purchase, or bridging finance to buy and extend.

Ground rent terms matter separately from the term length: an escalating ground rent can make a flat unacceptable to some lenders even on a long lease.

Mortgage finance for letting an existing home while buying another property to live in.

The existing home is financed on terms permitting the letting, while a separate residential mortgage may fund the new home. The two applications and completion arrangements need to be coordinated.

Life insurance pays out on the death of the person insured, as a lump sum or, on some policies, as regular payments. Term policies run for a fixed period: level cover stays the same throughout, decreasing cover falls each year and is designed for a repayment mortgage, and increasing cover rises over the term. Whole of life policies pay out whenever death occurs, as long as the premiums are kept up. A joint policy pays once, on the first death, while two single policies pay on each death, and a policy can be written in trust so the payout goes to the people chosen (MoneyHelper: what is life insurance).

Term life cover with no cash-in value is a pure protection contract in the FCA's terms, and advising on or arranging it is insurance distribution under the FCA's Insurance: Conduct of Business sourcebook (ICOBS), separate from the mortgage rules. Before offering cover an insurer carries out insurance underwriting, and the applicant's answers are subject to the duty described under consumer insurance disclosure. Life insurance is not a legal requirement for a mortgage.

Savings and the government bonus can go towards a first home bought with a mortgage, through a conveyancer, at least 12 months after the first payment in and within the scheme's price limit. Other withdrawals before later life carry a withdrawal charge.

The age limit, yearly allowance, bonus and price limit are set by the government; GOV.UK: Lifetime ISA has the rules in force.

The FCA defines a lifetime mortgage as a regulated mortgage, open only to older customers above a specified age, on which the lender does not seek full repayment until a specified life event (FCA Handbook glossary: lifetime mortgage). Interest can be rolled up and added to the loan, partly paid or paid in full, and a drawdown version pays the money in instalments. Where interest rolls up it compounds, so the balance grows faster each year, and the FCA's affordability rule does not apply to that kind of loan.

The Equity Release Council says the youngest applicant needs to be at least 55. Plans meeting its standards fix the rate, or cap it, for life, give the right to stay in the home and to move to a suitable property, allow repayments without a charge within the provider's criteria, and carry a no negative equity guarantee. It is one form of equity release.

LIFT has two parts. Under Open Market Shared Equity the buyer purchases a home on the open market, priced within a threshold set for the area and the size of home, and usually funds 60% to 90% of the price. Under New Supply Shared Equity the buyer purchases a new home from a housing association or council and usually funds 60% to 80%. The Scottish Government holds the rest.

The buyer has the whole title and grants the government a standard security for its share. On the open market scheme the buyer can increase their share later, and on a sale the government receives its percentage of the selling price. The mortgage must be a repayment mortgage. Purchases through LIFT are outside the Mortgage Guarantee Scheme, whose rules leave out shared equity schemes. Eligibility, price thresholds and funding are set for each financial year (mygov.scot: Open Market Shared Equity).

An LLP is a body corporate formed under the Limited Liability Partnerships Act 2000. Its members are not personally liable for debts the business cannot pay, its designated members send annual accounts to Companies House, and each member pays tax on their share of the profits through Self Assessment, as a partner in an ordinary partnership does (GOV.UK: limited liability partnerships). A member who meets the salaried member conditions is taxed as an employee instead (see salaried member).

For a personal mortgage, lenders assess a member on their profit share from the tax calculation and the LLP's accounts. Some landlords hold property through an LLP; lenders that accept LLP borrowers assess the members behind it and may ask for personal guarantees.

A mortgage secured against a building formally listed for its architectural or historic interest.

The lender assesses the property’s condition and any proposed work. Listing can affect which alterations are permitted, and listed building consent is a separate consideration from mortgage approval.

Sources: GOV.UK: historic environment.

The loan amount expressed as a percentage of the project costs included in the lender’s calculation.

The included costs and loan amount must be stated. Loan-to-cost is different from loan-to-value or loan-to-GDV, and a development facility may be limited by more than one of these measures.

Loan to gross development value divides the total facility by the gross development value (GDV) reported by the lender's valuer. It is one of two caps on a development loan. The other is loan to cost (LTC), and the facility is set at whichever of the two gives the smaller loan.

The percentage a lender will lend to varies by lender, by the type of scheme and by the developer's experience, so a quote should state both the LTGDV and the LTC it is based on. Property development finance shows how the two caps work together.

Lenders set a maximum multiple as one of the limits on residential borrowing, alongside their affordability assessment. The Bank of England's Financial Policy Committee limits the share of new residential mortgages lenders can make at high loan to income ratios, to guard against excessive household debt. Bank of England: high loan to income lending.

Loan-to-value, or LTV, expresses borrowing as a percentage of the property value used by the lender. A bridging quote should explain which loan amount and valuation basis are used in its LTV calculation.

For a simple first-charge example with no other secured debt:

£150,000 gross borrowing ÷ £200,000 lender valuation × 100 = 75% gross LTV.

This is an arithmetic illustration, not an available product, lender maximum or borrowing recommendation. It does not show how much cash would remain after deductions.

For a second charge or a facility secured on several properties, ask how existing debt, the additional loan and the relevant property values are treated. A calculation based only on the new loan can give an incomplete picture of the security position.

Someone who rents accommodation in a home shared with the resident landlord.

A homeowner should check whether their mortgage and insurance permit a lodger. Renting part of an occupied home differs from letting the entire property, and the legal arrangement depends on how the accommodation is shared.

There is no separate low income product and no legal minimum income for a mortgage in the UK. The loan is an ordinary residential mortgage, and the lender assesses affordability under the Financial Conduct Authority's responsible lending rules: income after tax, committed spending and living costs, with the payment tested against likely future interest rates (FCA Handbook, MCOB 11.6).

Lenders differ on whether they set a minimum income, which benefits and second incomes they count, the income multiple they apply and the longest term they allow. On a modest income those rules decide the size of the loan. Schemes such as shared ownership, First Homes and Right to Buy, a family member's income under a joint borrower sole proprietor mortgage, or a larger deposit then decide what that loan can buy.

Making Tax Digital (MTD) for Income Tax applies to sole traders and landlords registered for Self Assessment whose qualifying income is above a threshold. Qualifying income is total turnover from self-employment and property before expenses. From 6 April 2026 it applies where qualifying income was over £50,000 in 2024 to 2025; the threshold falls to £30,000 from 6 April 2027 (2025 to 2026 income) and £20,000 from 6 April 2028 (2026 to 2027 income). Employment income, dividends and a partner's share of partnership profit do not count towards it, and partnerships are not yet included (GOV.UK: work out your qualifying income).

Those in MTD keep digital records and send HMRC a quarterly update through compatible software. Each update is cumulative from the start of the tax year and gives totals for each category of income and expense, and a tax return still follows at the end of the year. For a self-employed mortgage the updates are current-year figures; lenders still assess the annual tax calculation, and whether a lender takes quarterly figures into account is its own decision.

Management accounts are prepared by or for the business, usually by its bookkeeper or accountant, to track trading between sets of annual accounts. They are not filed with HMRC or Companies House and are not audited, so a lender treats them as supporting evidence rather than as the income it assesses.

For a mortgage they show current trading: whether a business whose latest year's net profit fell has since recovered, or whether a new business is trading at the level its first figures suggest. A lender that considers them may want them prepared or confirmed by an accountant and read alongside business bank statements. Sole traders and landlords in Making Tax Digital for Income Tax also hold year-to-date totals in their cumulative quarterly updates to HMRC, which serve a similar purpose; partnerships and companies are outside that scheme and rely on management accounts. Whether a lender gives either any weight is set by its own criteria.

Finance that sits between senior debt and the borrower’s equity in a project’s funding structure.

In property development it is often subordinate borrowing secured by a second charge or other security. The senior lender’s consent and the agreement between creditors affect how it operates. It increases debt commitments and is repaid according to the agreed priority and exit terms.

Lenders that share data with the credit reference agencies report each account every month. When a payment is not made as agreed, the account is reported as in arrears, with a status code for how many months behind it is: 1 for one month, 2 for two, and so on up to 6 under the credit industry's Principles for the Reporting of Arrears, Arrangements and Defaults.

A missed payment is the lightest form of adverse credit. It is a different entry from a default, which a lender may record once an account is 3 months in arrears and normally by 6. A temporary reduced payment agreed with the lender is flagged as an arrangement to pay, although arrears may still be reported against the original terms. Negative information such as a missed payment usually stays on a credit report for six years.

Mortgage lenders look at how many missed payments there are, how recent they are, the highest status reached and which account they are on, and some apply a separate, stricter limit to missed mortgage payments.

After the buyer's offer and the seller's qualified acceptance, the solicitors exchange missives to agree the conditions. The concluding missive makes the contract binding, and a buyer who withdraws after that can have to pay the seller damages. Buyers are advised to insure the property from conclusion of missives unless the missives say otherwise (mygov.scot: making an offer). Where the offer incorporates the Scottish Standard Clauses (Edition 6), the risk of damage to or destruction of the property stays with the seller until settlement, so the buyer's solicitor confirms from the missives when the buyer's buildings insurance needs to start (Law Society of Scotland: Scottish Standard Clauses, Edition 6). mygov.scot: missives.

For Stamp Duty Land Tax in England and Northern Ireland, a purchase that includes both residential and non-residential property, such as a shop with a flat above, is charged at the non-residential and mixed rates: nil up to £150,000, 2% to £250,000 and 5% above, as at October 2026. The higher rates for additional dwellings do not apply to a mixed purchase (GOV.UK: buying an additional residential property).

Wales charges Land Transaction Tax on mixed use property at its non-residential rates, and its higher residential rates do not usually apply. Scotland charges Land and Buildings Transaction Tax at non-residential rates on the whole price, but the Additional Dwelling Supplement can apply to the part of the price attributable to a dwelling (Revenue Scotland: LBTT4011 mixed transactions). Whether a property counts as mixed use depends on the facts at the date of purchase, so a conveyancer or tax adviser confirms it.

The framework published in 2019 runs from category 1, factory-made three-dimensional structural units, and category 2, two-dimensional panel systems, through other pre-manufactured components to categories 6 and 7, site-based improvements.

Lenders consider MMC homes case by case. Some ask for accreditation such as BOPAS, developed with mortgage lenders to show an offsite system will last more than 60 years, and an acceptable structural warranty.

RICS calls the role the lender's independent monitoring surveyor; it is also known as a project monitoring surveyor or bank monitor. During construction the surveyor visits the site, reviews spending against the budget and the cost to complete, agrees progress and the drawdown amount with the borrower, and issues a drawdown certificate to the lender with a report on any emerging risks.

The surveyor acts for the lender, not the developer. See drawdown and property development finance.

A loan secured against property, repaid over an agreed term, where the lender holds a legal charge over the property until the debt is cleared.

The charge is what separates a mortgage from unsecured borrowing: it gives the lender a route to recover the debt from the property itself, which is why the property is assessed as closely as the borrower. Rate, term, repayment method and the criteria applied all follow from what the property is and what it is used for.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The Mortgage Charter was introduced in 2023, and HM Treasury published the current version on 26 March 2026, when lenders reaffirmed their commitment to it. Its signatories represent approximately 90% of the mortgage market. The commitments apply to regulated residential mortgages, not to buy to let.

Lenders support customers who are up to date with payments in switching to a new deal at the end of a fixed rate without another affordability check, where they are not borrowing more or changing the repayment type or term, which is how a product transfer can work. A new deal can be locked in up to six months ahead. Up-to-date customers can also, once, switch to interest-only payments for six months or extend the term with the option to go back within six months, without a new affordability check. Contacting a lender about payment worries does not affect the credit file, a borrower will not be forced to leave their home without consent, except in exceptional circumstances, within a year of the first missed payment, and customers in arrears are asked to keep working with their lender (HM Treasury: Mortgage Charter).

Under the 2025 scheme rules an eligible loan is a repayment regulated mortgage on a UK home the borrower will live in, for a first-time buyer or home mover, with a loan-to-value above 90% and no more than 95%. Buy-to-let loans and shared ownership or shared equity purchases are outside it, and value means the valuation or, if lower, the price.

The guarantee is between the government and the lender. The borrower takes an ordinary mortgage, and each lender still applies its own lending and property criteria. GOV.UK: 2025 Mortgage Guarantee Scheme.

For an MCD regulated mortgage contract, the kind of regulated mortgage normally used to buy a home, the FCA requires the lender to set out a binding offer in an offer document and to give the borrower a reflection period of at least seven days, during which the offer stays binding and can be accepted at any time (FCA Handbook: MCOB 6A.3). The offer can carry lawful conditions. The FCA's guidance gives as examples a material change after the offer, such as loss of employment or further secured borrowing that is likely to affect affordability, a change affecting the condition, value or title of the property, and the borrower knowingly giving incomplete or inaccurate information. A lender cannot use conditions to avoid a proper affordability assessment before it makes the offer.

Each offer has a validity period set by the lender. If completion is delayed beyond it, the lender may extend the offer, sometimes after fresh checks, or ask for a new application. The offer is separate from the purchase contract, so a withdrawal after exchange of contracts does not release the buyer from the purchase.

Mortgage payment protection insurance (MPPI) is a short-term policy that pays the monthly mortgage payment if the policyholder cannot work because of illness or injury, and some policies also pay on unemployment. It pays for a limited period set by the policy, such as one or two years, and covers only the mortgage payment rather than income.

The FCA Handbook classes this kind of cover as a payment protection contract: a non-investment insurance contract with general insurance elements whose benefits protect the policyholder's ability to keep making payments (FCA Handbook: glossary, payment protection contract). It is narrower than income protection insurance, which replaces part of income for as long as its benefit period allows, and it is separate from Support for Mortgage Interest, the state loan towards mortgage interest for people getting a qualifying benefit.

The lender instructs its own valuer and lends on that figure, not on the agreed price: on an ordinary purchase, lenders that state a basis lend on the lower of the price and the valuation, so a down valuation reduces the loan or raises the loan-to-value. Some properties are valued by an automated valuation model or a desktop valuation instead of an inspection.

Because it is not a survey, defects that would be costly to put right may not appear in it; a buyer who wants a view of condition commissions an RICS Home Survey. RICS: mortgage valuations and surveys.

A lender that repossesses a home has to sell it. If a section 106 agreement bound the lender as well, it could sell only to eligible buyers at the restricted price, so lenders that accept restricted homes look for a clause releasing or relaxing those terms on a repossession sale. The wording varies: some clauses release the lender at once, some after a period offering the home to eligible buyers, the council or a housing association, and some reimpose the restrictions on later owners.

For First Homes, government guidance says a mortgagee exclusion clause should be in every planning obligation: a lender enforcing its security can sell on the open market at open market value, and once the lender is repaid the council receives the remaining proceeds up to the value of the discount (GOV.UK: First Homes guidance). The clause differs from the mortgagee protection clause in a shared ownership lease, under which the landlord can cover part of a lender's loss.