Glossary of terms

Our language, explained

Glossary of Terms

Acquisition Costs

Incidental costs associated with securing ownership of real property such as agent commissions, mortgage application fees, professional fees and stamp duty.

Construction Costs

The total cost of building a real estate project.

Broker Fee

A fee, usually charged as a percentage of the overall project cost, for introducing the client/project.

CIL/S106

CIL means Community Infrastructure Levy – this is a contribution for community ground upkeep/doctors/playgrounds/lamp posts etc etc.

S106 is a council enforced payment for housing support. This is often in the form of affordable housing on the site, but sometimes the council will defer it to a payment.

GDV

Gross Development Value (end value of project)

Equity

The money/profit in a project.

First and Second Charges

First charge is the first or primary debt against a property. The Second charge is the second charge on the property and sits behind the First. Therefore, it is more risky to have a second charge as you have less control over the security. Second charge lending is often more expensive due to this risk.

Joint Venture

An agreement between two or more parties to undertake specific business venture or economic activity together.

Land Bank

A stock of land held by a developer with the intent to hold it for future development or until such a time as it is profitable to sell on to others.

LTV

The Loan to Value is a ratio term to express how high you will lend against a property value. 

Pre-Sale

Signing a contract to commit to purchase land or property that is yet to be developed. (Alternative names: Exchange, Sell Off-the-plan)

ROCE’s

Return on Capital Employed – this is the percentage rate return we get from an investment.

Professional Fees

Fees paid for work done by a professional such as an accountant, solicitor, architect and so on. (Alternative name: Consultant Fees)

PDR

Permitted Development Rights – this is a form of planning approval that doesn’t require a formal planning permission application.

PG’s

Personal Guarantees – this is a binding agreement which would allow us to legal pursue a client for losses if we can not cover the losses from the target property security.

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