Glossary of terms

Term	Definition
Agent	Intermediary/Broker: a professional who helps clients find and purchase financial products, such as bridging loans, connecting them with the providers of those products.
AIP	An Agreement in Principle, also known as a DIP (Decision in Principle) is a 'loan offer in principle' document provided by a lender that indicates how much they might be willing to lend to a borrower. An AIP is not a formal or legally binding mortgage offer; it is an estimate based on the information the borrower provides.
AM	Asset Manager
AR	An Appointed Representative (AR) is an individual or firm that undertakes regulated activities under the regulatory oversight of a Principal firm, which directly authorised by the Financial Conduct Authority (FCA). This allows the AR to conduct regulated activities without needing to be directly authorised by the FCA themselves.
Arrears	Arrears refer to the state of being behind in loan payments, meaning that one or more scheduled payments on an loan repayment have been missed.
Article 4 Direction	An Article 4 Direction is a planning regulation used by local planning authorities to remove "permitted development rights" in specific areas or for particular types of development. Where an Article 4 Direction is in place, a property developer is required to submit a full planning application to the local council for works or changes of use that would otherwise be considered permitted development.
Asset	Property on which the charge is secured
AST	Assured Shorthold Tenancy is the most common type of tenancy agreement for private residential rentals in England and Wales. It outlines the terms and conditions of the tenancy, including rent, deposit protection, and the responsibilities of both landlord and tenant.
AVM	Automated Valuation Model - Service that uses mathematical or statistical modelling combined with databases of existing properties and transactions to calculate real estate values. The majority of automated valuation models (AVMs) compare the values of similar properties at the same point in time.
BCP/BIPS/BP	One one-hundredth of a percentage point: 1/100th of 1%= 0.01%. A basis point (BPS or bp) is a standard unit of measurement used in finance to denote the smallest change in financial value or rate, or the difference (spread) between two interest rates or yields.
BBR	Bank Base Rate, the official interest rate set by the Bank of England's (BoE's) Monetary Policy Committee (MPC). It is considered the most important interest rate in UK finance and is the foundation for many other interest rates in the economy.
Blended Interest	Interest calculation method
BMV	Below Market Value
BQC	A Catalyst internal acronym for our "Bridge Quote Calculator"
BTL	Buy to Let, the purchase of a property specifically to let/rent for investment purposes, rather than the owner living in the property.
Capital	The financial resources or assets available to an individual, institution or business that can be used to generate wealth, fund operations, or support growth and investment.
Capital Appreciation	A rise in an investment's market price. Capital appreciation is the difference between the purchase price and the selling price of an investment. Capital appreciation isn't taxed until an investment is sold, and the gain is realized, which is when it becomes a capital gain.
CCJ	A County Court Judgment is a court order that formally acknowledges money owed to a creditor and the legal requirement to repay.
CIL	Community Infrastructure Levy is a planning charge that local authorities can impose on new developments. CILs aim to raise funds from developers to help deliver the infrastructure needed to support new building projects, including transport links and community facilities, such as schools. New developments with an additional 100 sq m of floor space, or a new build, are potentially liable for CIL.
COT	Certificate on Title, also known as a 'Certificate of Title', is a legal document which confirms and certifies the legal ownership and status of an asset's title.
Class C3	In UK planning, C3 refers to the Dwelling houses use class within the Town and Country Planning (Use Classes) Order 1987. This classification covers a wide range of residential properties intended for use as a single household dwelling
Collateral	Assets that lender accepts as security for a loan
Collateral Warranties	A collateral warranty is a contractual agreement often used in the construction industry to create a direct contractual link between parties who would not otherwise have a direct contractual relationship, typically due to the legal principle of "privity of contract". It is collateral because it sits alongside an existing, underlying contract (for example: a building contract or consultant's appointment).
Colt Bungalow	A Colt bungalow is a timber-framed construction built by W. H. Colt Son & Co Limited, which including bungalows, houses, and other structures. As they are of 'non-standard' construction, owners can find it difficult to obtain a standard mortgage.
Completion	At Catalyst, loan 'completion' is the moment at which a loan is funded, and the borrower receives their money. This is the start of a borrower's loan, and the completion of the underwriting process.
Contingency	In property development, a contingency refers to ringfenced monies set aside for unforeseen costs that may arise during the course of a project. It provides as a financial buffer against unexpected expenses without jeopardising the project's viability or profitability. A contingency of 10-20% of development costs is typical.
CoW	Cost of Works - Sum of costs necessary to complete development/refurb.
Cost Undertaking	Written legal commitment to pay a lender's fee (for example the lender's legal fee)
Current Market Value	Current Market Value, also known as Open Market Value, is the estimated price an asset (property) would fetch if sold on the open market in its current condition in an arm's-length transaction.
CVA	Company Voluntary Arrangement is a formal insolvency procedure that allows a financially distressed company to reach a legally binding agreement with its creditors regarding the repayment of its debts.
Debenture	A debenture is a long-term debt instrument to raise capital. It represents a loan made to a company and is typically unsecured, meaning it is not backed by specific physical assets or collateral, but rather by the general creditworthiness and reputation of the issuing company
Deed of Subordination	Also known as a Subordination Agreement, it is a legal document that formally establishes the priority of claims (charges) held by different creditors against a debtor or specific asset. In essence, it dictates which debt will be paid first in the event of default or foreclosure.
Default	Default refers to the failure to fulfil a legal or contractual obligation, typically financial. Put simply, not doing what you promised to do under the terms of an agreement or contract. Borrowers of bridging finance can become in default of their loan should they fail to make the pre-agreed repayment schedule.
Desktop Valuation	Also known as a remote valuation, is a method of estimating a property's value without a physical inspection by a surveyor. Instead, the valuation is conducted remotely by a qualified professional (often an RICS-accredited surveyor) who utilises various online resources and data sources to form an expert opinion on the property's market value.
DIP	A Decision in Principle, also known as a AIP (Agreement in Principle) is a 'loan offer in principle' document provided by a lender that indicates how much they might be willing to lend to a borrower. A DIP is not a formal or legally binding mortgage offer; it is an estimate based on the information the borrower provides.
DoP	Deed of Priority. A legal agreement that formally establishes the agreed order in which two or more creditors will have their claims or security interests ranked over the same assets (property) of a common debtor. It's essentially a contract that dictates the hierarchy of repayment, especially in the event of the debtor's default or insolvency; it overrides the general rule of "first in time, first in right" for registered charges.
Drawdown	With refurbishment and development finance, a 'draw down' is a loan payment made to the borrower during the building process, it typically covers building costs and is paid in arrears.
EPC	Energy Performance Certificates are documents that report and rate the energy efficiency of a building from A (very efficient) to G (inefficient)
ERC	Early Repayment Charges are fees that some lenders charge borrowers who repay all or part of their loan/mortgage balance sooner than agreed in their mortgage contract. Many Catalyst loan products do not have ERCs
EOD	Evidence of Deposit
Extension	A loan extension is an agreement between a borrower and a lender to prolong the repayment period of an existing loan.
EWS1	External Wall System Fire Review process and the associated form (EWS1 form) are designed to assess the fire safety of a building's external wall system (EWS), which includes cladding.
Facility	The loan/finance provided by the lender to the borrower.
First Charge	The primary legal claim that a lender holds over a borrower's asset (property) or assets used as security for a loan
Floating Charge	Additional security. Charge not on definite property. Upon default or if money is not made back from property, money can be taken from company's other assets.
Freehold	The most extensive form of property ownership in the UK, whereby the borrower owns the property and the land it sits upon outright, with no time limit.
FRI Lease	A commercial property lease which makes the tenant responsible for the costs of all repairs, maintenance, and insurance of the leased property. This is a common arrangement, particularly in long-term commercial leases.
FSMA	The Financial Services and Markets Act 2000. A UK financial services regulatory framework which governs the regulation of various activities within the financial services industry, including banking, insurance, and investment
Flying Freehold	Where a portion of one freehold property physically extends over or under a different, neighbouring freehold property
Gifted deposit	A sum of money given by a third party, typically a family member, to someone buying a property, to help them fund a portion of their deposit.
GDV	Gross Development Value is an important financial metric in UK property development. It is the estimated total market value that a property development project is expected to achieve upon completion at either sale or rental.
GIA	Gross Internal Area
HMO	A House in Multiple Occupation is a property rented by people who are not from one "household" but share facilities such as a bathroom, toilet, or kitchen.
ICR	Interest Coverage Ratio is a financial metric for buy-to-let (BTL) mortgages, which measures a borrower's ability to cover their interest payments on outstanding debt using their income.
ILA	Independent Legal Advice provided by a solicitor who is completely impartial and independent of any other parties involved in a particular transaction or agreement.
Indemnity Policy	Sometimes referred to as 'indemnity insurance' is a policy purchased to protect against potential financial losses or legal costs arising from a specific property defect or risk. The insurance doesn't resolve the underlying issue or defect, but provides financial protection against the costs and damages that could occur if a third party claims due to the defect. It's a common tool used during conveyancing to facilitate property transactions that might otherwise be delayed or derailed by legal problems.
Insolvency	When an individual or company is unable to pay their debts when they fall due.
IRR	Internal Rate of Return, a financial investment metric used to estimate the profitability or potential yield of a project or investment.
IVA	Individual Voluntary Arrangement, a legally binding agreement between a debtor and their creditors to repay all or part of their debts over a set period. It is an alternative to bankruptcy and typically lasts for 5 to 6 years.
JV	A joint venture is a collaborative business arrangement between two or more parties who collaborate to achieve a specific project. Unlike a full merger, the business involved typically retain their separate legal identities outside of the JV.
KYC	Know Your Customer is a process that financial services companies undertake to verify the identity of their borrowers and assess their risk profile. KYC is also linked to anti-money laundering (AML) processes and helps prevent finance companies from being exploited for illicit activities.
Leasehold	Is a type of property ownership whereby the owner owns a property (typically a flat, but sometimes a house) for an agreed, fixed period of time, as defined by a lease agreement with the freeholder (landlord). The leaseholder has the right to occupy the property for the duration of the lease, but they do not own the land on which the property stands.
Leverage	A borrowing strategy of using a loan or mortgage to fully or partially finance the purchase of property, rather than paying for it entirely with capital (equity).
LTC	Expressed as a percentage, Loan to Cost is a key financial metric in property development, which represents the ratio between the total loan amount provided by a lender and the overall costs associated with a specific development project.
LTGDV	Expressed as a percentage, Loan to Gross Development Value is a key financial metric used to assess the amount of debt funding a project receives in relation to its estimated total market value upon completion.
LTV	Expressed as a percentage, Loan to Value is a fundamental financial ratio. It represents the proportion of a property's value that a lender is willing to finance through a mortgage or loan.
Margin	The loan margin, also known as 'lender's margin', refers to the additional interest rate charged by a lender above a cost of capital or base rate. This margin represents the lender's profit; it covers their operational costs and accounts for the risk associated with the loan.
Memorandum Of Sale	A Memorandum Of Sale (MOS) is a property transaction document which records the key details of a property sale once an offer has been accepted by the seller. It acts as a confirmation of the agreed deal and marks the beginning of the legal process of transferring property ownership.
MUFB	A Multi-Unit Freehold Block is a recognised category of property referring to single freehold properties that have been divided into multiple, self-contained residential units.
NTA	A Nominee Trust Agreement is a legal arrangement where one person or entity, the nominee (or trustee), holds the legal title to an asset on behalf of another person or entity, the beneficial owner (or nominator).
Off Plan Property	Buying "off-plan" means purchasing a new-build house or apartment before construction is complete, and sometimes even before building work has started.
OMV	Open Market Value, also known as Current Market Value, is the estimated price an asset (property) would fetch if sold on the open market in its current condition in an arm's-length transaction.
Overage	Agreement that the buyer will pay extra, on top of the original purchase price, if and when certain events happen. For example, if the buyer increases the value of the land by obtaining planning permission.
Pari-Passu Debenture	Pari-passu is a Latin phrase meaning "equal footing" means that two or more parties to a financial contract or claim are all treated the same.
PBSA	Purpose Built Student Accommodation - Housing built specifically by private developers for students to live in, usually taking the form of cluster flats (many rooms with shared kitchen and living areas), or private studios, both with attached leisure facilities and these days 'cool' added bonuses like cinemas, gyms, and games rooms.
PC	Practical Completion - Generally, it is the point at which a building project is complete, except for minor defects that can be put right without undue interference or disturbance to an occupier.
Peppercorn Rent	A token or nominal rent. A peppercorn rent is often found where a premium has been paid for a lease.
PD	Permitted Development grants rights to enable homeowners to undertake certain types of work without the need to apply for planning permission.
PEP	Politically Exposed Person, a person who is deemed high risk due to the higher risk for potential involvement in bribery and corruption due to their position and the influence they may hold. Examples of a PEP include head of state, member of the judiciary, member of the governing body of a political party, etc. Also classed as PEP if a member of PEP's family or a close associate.
PG	Personal Guarantee, assurance you will personally repay a source of business credit in event of business failing to do so
PIP	Percentage in point is the smallest price move that an exchange rate can make. In practical terms, a pip is one-hundredth of one per cent, or the fourth decimal place (0.0001).
PI	Professional Indemnity and Professional Indemnity Insurance (PII), also known as PI insurance is a business insurance designed to protect professionals and businesses against claims made by clients or third parties who have suffered a financial loss or damage as a result of negligent services, errors, omissions, or inaccurate advice provided by the insured.
PoA	Proof of Address OR Power of Attorney
Pre-emption clause	Also known as a pre-emption right, is a law which grants a specific party (the beneficiary) the first right to purchase a property or land should the owner decide to sell it. Sometimes referred to as a right of first refusal.
Proc Fee	Commission paid to a broker/intermediary by a lender on completion of their client's (the borrower's) loan. Catalyst proc fees typically range from 1% to 2%, depending on the product type.
PSC	A Person with Significant Control is an individual or relevant legal entity who owns or controls a company and is registered on Companies House.
QS/MS	Quantity Surveyor/Monitoring Surveyor
Redemption	When the loan is repaid, the end of the Loan
Redbook Valuation	Valuation that meets the criteria set out by the Royal Institution of Chartered Surveyors (RICS). These include ethical standards, duty of care, the qualifications of the valuer and the minimum content of a valuation report. The name 'red book' refers to the distinctive colour of the cover of the 'RICS Valuation - Global Standards' book.
Retained Interest	Interest calculation method. With retained interest, the lender calculates the total interest payments due for the duration of the loan term and deducts this amount from the gross loan facility at the outset. The borrower then receives a lower net loan amount upfront, but is not required to make monthly interest payments during the loan term.
RICS	Royal Institution of Chartered Surveyors - Professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure.
Rolled Interest	Interest calculation method, sometimes referred to as deferred interest, is a method of charging interest on a loan where the borrower does not make interest payments during the loan term. Instead, the interest accrues over the loan period and is added to the principal balance, becoming payable as a single lump sum at the end of the loan term.
ROT	Report on Title, an important document prepared by a property buyer's solicitor or conveyancer after they have completed their investigations into the property being purchased. It provides a detailed summary of the legal status of the property, outlining any potential issues, restrictions, or rights that might affect the buyer's ownership or use. (A ROT differs from a COT, which a specific document provided by a solicitor to a lender, confirming that the lender's instructions have been followed and the title is good and marketable).
Schedule of works	Contract document that lists the works required on a building project. The Schedule references the requirements included in the specifications and contract drawings plus any additional 'builders work' or 'fixing schedule' type items, this is commonly referred to as a specified schedule of work.
SDLT	Stamp Duty Land Tax is a tax imposed by HMRC on the purchase of land and properties with values over a certain threshold
Second Charge	A further loan secured against a property that already has an existing first charge loan/mortgage in place. The second charge lender has a secondary legal claim on the property's title, meaning their claim for repayment is subordinate to that of the first charge lender.
S106	Section 106 agreement, a private agreement made between local authorities and developers that can be attached to planning permission to make a development acceptable which would otherwise be unacceptable in planning terms. The land itself, rather than the person or organisation that develops the land, is bound by a Section 106 Agreement, something any future owners will need to take into account.
Serviced Interest	Interest calculation method, whereby the borrower makes regular monthly payments covering the interest accrued on the outstanding loan balance. The capital amount of the loan remains is then repaid as a single lump sum at the end of the loan term.
Short Form Valuation	A simplified property valuation report, typically used for less complex or lower-risk situations. A valuer will physically visit the property but the report provided is significantly less detailed than a full valuation report/Red Book valuation.
SIC	Also known as SIC Codes, a standard Industrial Classification, a 5 digit Standard Industrial Classification code which is used by government bodies and agencies (such as Companies House and the Office for National Statistics) to systematically identify and categorise the principal business activities of companies operating in the UK.
SLA	Service Level Agreement, a commitment between a service provider and a client. An SLA can cover specific aspects of service quality, such as timescales and availability and helps sets service expectations
SONIA	Sterling Overnight Index Average. It is a key interest rate benchmark in the UK financial markets, administered and published daily by the Bank of England
SPA	Share Purchase Agreement, a legal contract that formalises the terms and conditions under which shares in a company are acquired.
Sponsor	The borrower
SPV	Special Purpose Vehicle (holding company) - Subsidiary created by parent company to isolate financial risk. Legal entity created for a specific purpose. In context of raising capital, SPV can be used as a funding structure, by which all investors are pooled together into a single entity.
SRA	Solicitors Regulation Authority, the independent regulatory body for solicitors and law firms in England and Wales. Its primary purpose is to protect the public by ensuring that solicitors meet high standards of practice and by acting when risks are identified.
Subsidence	Sudden sinking or gradual downward setting of the ground's surface.
SVR	Standard Variable Rate, an interest rate set by individual mortgage lenders, rather than directly tracking an external benchmark like the Bank of England Base Rate.
Tenancy	A property tenure which allows a person (the tenant) the right to occupy and use the property for a specified time period, typically in exchange for rent paid to the property owner (the landlord).
TPA	Third Party Authority is the legal and/or contractual permission given by an individual (the principal) to another person to act on their behalf. This authority allows the third party to perform certain actions, access certain information, or make decisions that would otherwise require the principal's direct involvement.
TR4	A specific form used by HM Land Registry to transfer a charge or portfolio
USPs	Unique Selling Points
VP	Vacant Possession, whereby the property is currently unoccupied. 'Sold with vacant possession' means a given property must be empty on the day that you complete your purchase or sale of it.
Yield	The income generated by an investment over a specific period, typically expressed as an annual percentage of the investment's cost or current market value
90 Day Valuation	The assessment of a property's value, assuming it must to be sold within the constrained timeframe of 90 days. This type of valuation differs from an Open Market Value (OMV), which assumes a reasonable period to find a buyer and achieve the best price.
180 Day Valuation	The assessment of a property's value, assuming it must to be sold within the constrained timeframe of 180 days (approx. 6 months). This type of valuation differs from an Open Market Value (OMV), which assumes a reasonable period to find a buyer and achieve the best price.

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