Glossary
Accrual
Expenses incurred that have not yet been invoiced. Funds are set aside – accrued – in anticipation of the invoice.
Active order
A buy order placed by an investor who has cash in their account and can therefore trade when a corresponding sell order is placed.
Arrangement fee
A fee taken by Assetz Exchange when a property is first purchased. Read more.
AST
Assured shorthold tenancy. This is the most common form of tenancy in the UK.
Buy price
A price put forward by an investor to buy an investment on the Exchange.
Capital gains/growth
The increase in the value of an investment due to the rising price of the investment. If the investment is sold at this increased value then the gain is said to be realised, otherwise the gain is unrealised.
Contingency fund
A buffer set aside to cover any unexpected costs. Read more.
Contingency target
The target level of a contingency balance. Read more.
Conveyancing
The legal transfer of a property from one owner to another
Creditor
Costs that have been incurred and invoiced but not yet paid.
Dividend income
Income we have been advised is taxable on the investor as dividend income for income tax purposes. Investors should seek their own tax advice. Read more.
The Exchange
Our marketplace for investors to buy or sell their investments
The FCA
The Financial Conduct Authority is a financial regulatory body that regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom.
Fixed costs & contingency (FCC)
We call the fixed costs involved with the purchase (stamp duty, legal fees, our fees, a provision for contingency and any costs of upgrading the property) ‘Fixed costs & contingency’ or ‘FCC’.
One of the main advantages of investing with Assetz Exchange is that trades on our secondary market (the Exchange) are frictionless. The new buyer pays the FCC for the trade, meaning the seller is fully reimbursed. Investors in a traditional buy-to-let property have no way of recouping these sunk costs when they sell the property.
Freehold
The freeholder of a property owns it outright, including the land it’s built on. The freeholder is responsible for maintaining the property and land.
FRI lease
Full repairing and insuring lease. A lease where the responsibility to undertake all repairs and maintenance and to pay for insurance falls on the leasee.
Gross price
The gross price is the net price + FCC.
Ground rent
Payments (typically annual) made by the holder of a leasehold property to the freeholder.
HMO
House in multiple occupation. A home is an HMO if at least three tenants live there, forming more than one household with bathroom or kitchen facilities shared between tenants.
HPI
House price index. This is a national statistic produced by the Land Registry that shows changes in the value of residential properties in England, Scotland, Wales and Northern Ireland.
Inactive order
A buy order placed by an investor who has no cash in their account and therefore cannot trade until the account is funded.
Interest income
Income we have been advised is taxable on the investor as interest income for income tax purposes. Investors should seek their own tax advice. Read more.
Internal Repairing Lease
A lease where the responsibility of most or all of the internal repairs lies with the tenant but external and structural repairs remain the responsibility of the landlord.
Landlord
The owner of a house or property that is leased to an individual or a business.
Lease
A contract outlining the terms under which one party agrees to rent property owned by another party.
Leaseback
An arrangement where a company sells a property to a purchaser and then leases it back from them for a given period of time.
Leasehold
Under a leasehold you own the property for the length of the lease agreement with the freeholder. When the lease ends, ownership reverts back to the freeholder.
Leveraged/Geared
Funding part of a property purchase with a mortgage.
Match
When an active buy order ‘matches’ with a corresponding sell order to allow a transaction(trade) to take place.
Net price
The net price is the price of the property excluding the costs associated with the purchase. This is the price you would typically see advertised in an estate agent or on Rightmove.
Net price (Sell)
Value of a property based on the lowest price offered by a seller on the Exchange.
Landlord
The owner of a property who rents it to a Tenant.
LTGDV
Loan to gross development value. The loan amount expressed as a percentage of the expected valuation of the development when it is complete. This is calculated by dividing the loan amount by the RICS valuation for the completed development.
LTV
Loan to value. The loan amount expressed as a percentage of the valuation of the development. This is calculated by dividing the loan amount by the RICS valuation for the site as is.
Monitoring fee
A percentage of the gross rent received for the property taken by Assetz Exchange to cover day-to-day systems and administration. Read more.
Sell price
A price put forward by an investor to sell an investment.
Order
A buy or sell price placed by an investor on the Exchange.
Prepayment
Payments for goods or services that have not yet been received. An example is a service charge, as these are typically invoiced in advance for the following period.
RICS valuation
A valuation of the property undertaken by a Royal Institution of Chartered Surveyors (RICS) registered surveyor. RICS is a professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure.
Risk profile
Assetz Exchange’s assessment of the risk level of an investment
SDLT
Stamp Duty Land Tax. A tax charged by the government on the purchase of property and land.
Service charge
Service charges are payable by the leaseholder to the landlord (or landlord’s agent) for the services provided, as determined by the lease. Service charges normally include costs for maintenance, repair and insurance of the building and communal areas plus the employment of staff and management of the property.
Serviced plot
A plot that is ready to build on. This means all utility connections, sewage and road connections are already in place
Showhome
A display home built on a development designed to showcase what the unbuilt properties will look like when finished. These homes are typically in a prime location on site and come furnished to a high standard.
Tenant
An individual or business that rents a property from a landlord.
Two-factor authentication (2FA)
Vote
All significant decisions impacting an investment on the platform will require an investor vote. Read more.
Total return
The complete return from a property/investment. This includes interest/rental income plus capital gains (realised and unrealised), alongside any bonuses paid.
Yield
An indication of how much of an annual return you are likely to get on an investment(excluding capital movements), calculated by expressing a years’ rental income as a percentage of how much the property cost.
Net yield
The annual income, less expected costs (such as managing agents fees, service charge, ground rent, etc) expressed as a percentage of the current gross price of the property.