Glossary

The world of property investment can sometimes be confusing; our Glossary is full of useful terms to help every investor, whether they are a first time landlord or a seasoned portfolio builder.


All

Abeyance

Abnormal return

Above ground risk

Absentee landlord

Accelerated Payments

Accrual Rate

Additional Voluntary Contributions

Agent

Alternatively Secured Pension (ASPs)

Annual Allowance

Annual Allowance charge

Annuity

Annuity rates

Arrears

Asset Class

Automatic Enrolment

Basic State Pension

Beneficiary

Benefit Crystallisation Event

Bricks and Mortar

Buy-to-Let

Buy-to-Let Mortgage

Capital

Capital Appreciation

Capital Gains Tax

Capped Drawdown

Cash Lump Sum

Chain

Commercial Property

Company Pension

Completion

Compound Interest

Conditions of Sale

Conveyancing

Critical Yield

Deeds

Defined Benefit Scheme

Defined Contribution Scheme

Deflation

Dependant

Deposit

Disposable Income

Diversification

Drawdown

Early Retirement

Equity

Equity release

Estate

Exchange of Contracts

Final Pensionable Salary

Finance Act 2004

First Time Buyer (FTB)

Fittings

Fixed Fee

Fixtures

Flexible Drawdown

Foreign Direct Investment (FDI)

Formal State Pension Forecast

Freehold

Free-Standing Additional Voluntary Contributions

GAD Rates

Gazumping

Gazundering

Gross Profit

Gross Yield

Ground Rent

Guidance Guarantee

Hands-Off Investment

Hands-On Investment

Help to Buy

Her Majesty’s Revenue and Customs (HMRC)

Houses-of-Multiple-Occupation (HMO)

Hybrid Arrangement

Ill-Health Benefit

Income Drawdown

Income Tax

Income Tax Marginal Rate

Independent Financial Advisor (IFA)

Individual Savings Account (ISA)

Inflation

Inheritance Tax

Interest-Only Mortgage

Interest Rates

Investment Property

Investor

Joint Credit

Joint Liability

Key Money

Land and Buildings Transactions Tax (LBTT)

Landlord

Landlord Protection Insurance

Lease

Leasehold

Legal Costs

Letting Agent

Licensed Conveyancer

Lifetime Allowance

Listed Building

Loan to Value (LTV)

Management Company

Annuity


A fixed sum of money that is paid out to you by a chosen insurance company as an annual income until you die. In general there are different types of annuity that you can buy:

  • Single: pays a high level of income, but will stop upon the pension-holder’s death.
  • Joint: continues paying a fixed percentage of an individual’s income to their spouse upon the pension-holder’s death for the duration of the annuity.
  • Guaranteed period: guaranteed for a specified period of time, regardless of the death of the pension-holder (in which case it would be transferred to a named beneficiary).
  • Annuity protection: guarantees that, if you die before the age of 75, the balance of a pre-arranged percentage of your annuity will be available in a lump-sum (taxable at 35%).
  • Escalation: increases each year to keep up with the rising cost of living, rather than remaining static over the course of retirement.
  • Overlap: if an individual has both a joint annuity and a guarantee period, there is the option of an overlap, meaning that, should their spouse die, the surviving partner would receive their spouse’s pension alongside their own.

Within these options, there are a number of variables that can affect your annuity and provide a level of personalisation. For example, you can get an impaired life or enhanced annuity that pays more if the owner has certain medical conditions that diminish life expectancy, a postcode annuity based on the average life expectancy of the area in which the owner lives, an investment-based annuity which is correlated with the investment market, or a Purchased Life Annuity (PLA) which is purchased with money not tied to your pension pot. You can even purchase a temporary annuity which provides payment for a fixed term, up to a maximum of 5 years, if you didn’t want to commit to a lifetime annuity.

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