Glossary

    AJAX progress indicator
    • a

    • Annual Rental Uplift
      Increase in rental income expected on an annual basis. This is usually built into rental agreements at the outset.
    • Anti-Money Laundering (AML)
      Money laundering is the process of transforming the proceeds of crime into ostensibly legitimate money or other assets. Four Acts of primary legislation govern Money laundering and terrorist funding in the UK; 1. Terrorism Act 2000 2. Anti-terrorism, Crime and Security Act 2001 3. Proceeds(...)
    • Articles of Association
      One of the constitutional documents of a company that sets out its management and administrative structure. The articles dictate the internal affairs of the company, such as director and shareholder rights, the issue and transfer of shares, and the organisation of meetings.
    • Asset Class
      A class of economic property that has similar characteristics.  Listed shares, government bonds and real estate are all asset classes.
    • Assured Shorthold Tenancy (AST)
      An AST is the most common type of residential tenancy, and is also used to describe the agreement documenting the tenancy.
    • b

    • Below Market Value (BMV)
      This is the difference between the purchase price of the property and its current market value. Current market value is determined by a RICS valuation. The BMV is expressed as a percentage.
    • Beneficial Shareholder / Owner
      An investor who owns the economic value and other shareholder benefits attached to shares, such as dividends and tax reliefs, but the registered title to their shares is held with another person or entity, often for administrative convenience e.g. nominee.
    • Buy To Let (BTL)
      BTL is the purchase of a property specifically to rent it out.
    • c

    • Capital Gains
      Capital gains are the difference between an investment’s sale proceeds and the investment cost. If sale proceeds are lower than investment cost, then the capital gains are negative i.e. a capital loss. Capital Gains does not account for any dividends received or any transaction costs.
    • Capital Gains Tax (CGT)
      A tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price. Capital gains taxes are only triggered when an asset is realized, not while(...)
    • Corporation Tax
      Corporate taxes are taxes against profits earned by businesses during a given taxable period; they are generally applied to companies' operating earnings i.e. after expenses such costs of sales, overheads, interest and depreciation.
    • Crowdfunding or Crowdinvesting
      The funding of projects or ventures by raising money from a large number of people, usually online.  The three main types of crowdfunding are equity, debt and rewards/donations.
    • d

    • Dashboard
      This is where investors can monitor and manage their current and pending investments and update their personal profiles.
    • Debt
      Money owed by one person/company to another. The borrower has to repay the money a later date, and generally also has to pay interest on a periodic basis usually monthly or annually.
    • Developer
      A property developer and approved partner of British Pearl.Share Investors, Loan Investors and Developers are collectively known as BP Members.
    • Dilution
      A reduction in the ownership percentage of a share in a company caused by the issue of new shares.
    • Diversification
      An investment strategy that involves mixing the amount, values and kinds of investments within a portfolio to spread risk and minimise losses.
    • Dividend Tax
      An income tax levied on the dividend payments received by the shareholders of a company.
    • Dividend Yield
      Dividend yield is an annual measure of the net income expressed as a percentage of the total cost of investing in a propertyExample: The advertised property price is £90,000 and the transaction costs are a further £10,000, meaning the total cost of purchase is £100,000. This particular(...)
    • Dividends
      The distribution of a portion of a company’s (SPV’s) profits to investors.Dividends are the amounts paid, on a quarterly basis, to all investors in a property. Dividends (distributable profits generated from net rental income) are calculated as gross rent, less deductions for:(i)(...)
    • e

    • Enterprise Investment Scheme (EIS)
      A UK tax scheme offering income tax and capital gains tax reliefs to qualifying private investors who invest in eligible businesses.
    • Equity
      Shares or other securities that represent an ownership interest in a company.
    • Equity Crowdfunding
      A type of crowdfunding that enables multiple investors to a buy shares, or other equity interests, in a company, usually through an online process.
    • Exit
      An event when investors may be able to cash in and sell their shares or loan units.
    • f

    • Financial Conduct Authority (FCA)
      The FCA is the UK financial services regulatory authority, formerly called the Financial Services Authority (FSA).
    • Forecast Dividends
      Forecast dividends are the quarterly payments that an investor expects to receive from their property investment.
    • g

    • Gain/Loss
      This is the difference between the sale proceeds from an investment and its total cost (which includes any transaction costs). If sale proceeds are lower than total cost, then the amounts are negative (a ‘loss’).
    • Gross Development Value
      The estimated value of a property on a development project, once the construction or refurbishment is completed.
    • Gross Rent
      Gross rent is the forecast or actual rental income received, before any deductions whatsoever. For example, if we estimate that we can let a property for £1,000 per month, then forecast gross rent is £12,000 per annum.
    • Gross Rental Income
      How much rent a property investor will earn from their property within a year, before the deduction of any costs.
    • Gross Rental Yield (GRY)
      Gross rental yield is the forecast gross rent expressed as a percentage of the latest property value.Example: If gross rent is forecast at £10,000 for a property valued at £100,000. The GRY would be £10,000 divided by £100,000, which is 10%. 
    • h

    • HMRC
      The Her Majesty’s Revenue and Customs (HMRC), is a government department that administers and collects major taxes such as income tax, corporation tax, and capital gains tax.
    • House in Multiple Occupation (HMO)
      A house, or other dwelling, which is occupied by persons who do not form a single household. HMO refers to residential properties not purpose—built for multiple occupation, where ‘common areas’ exist and are shared by more than one person or household.
    • House Price Index (HPI)
      An official statistic provided by the land registry that captures changes in the value of residential properties in England and Wales. We use the HPI to revalue the properties on a monthly basis based on the data for particular borough or region. At present the HPI contains details on over 19(...)
    • i

    • Income Tax
      This is a tax levied directly on personal income which includes earned income such as salaries and commissions and unearned income such as dividends, interest and rents.
    • Information Pack
      Contains pertinent details of the investment and financial information, supported by professional reports from solicitors and surveyors.
    • Interest Service Cover Ratio (ISCR)
      A ratio that measures the extent to which the rental income from a property would cover the cost of debt servicing i.e. monthly interest payments.  The ISCR is typically associated with a bullet loan, where principal is repaid at the end of the loan period.
    • Investment Cost
      The price paid for the property investment including transaction costs.
    • Investment Exit Date
      This is the date when it is anticipated that the property investment will be offered for sale on the open market. This date is clearly marked in the Information Pack.
    • Investment Term
      This is the period of time that the investment will be listed (and traded) on the site before the property is sold on the open market through an estate agent. The Investment Term may differ in practice to the one indicated in the Information Pack, if the Investment and Risk Team believes(...)
    • Investor Account
      This is the money account (much like a bank account) which:investors fund (with not less than the £100 minimum investment amount) where your money sits pending investment, and where dividends (for Share Investors) and interest (for Loan Investors) are paid during the life of an(...)
    • k

    • Know Your Client (KYC)
      The regulatory process performed to verify the identity of customers to help prevent against money laundering and other financial crimes.
    • l

    • Land Registry
      Land Registry (officially known as Her Majesty's Land Registry) is a non-ministerial government department created to register the ownership of land and property in England and Wales. It is one of the largest property databases in Europe.
    • Leasehold
      There are two ways of owning land in England and Wales: leasehold and freehold.Owning the freehold means owning the building and the land it stands on outright, in perpetuity. They have responsibility for maintaining the fabric of the building – the roof and the outside walls. Whole houses(...)
    • Lettable
      A property capable of being rented or leased.
    • Liquidity
      Describes the degree to which an asset can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets. It is safer to invest in liquid assets than(...)
    • Loan Investor
      Is an investor providing capital to the SPV in the form of a loan i.e. they are lenders.Share Investors, Loan Investors and Developers are collectively known as BP Members.
    • Loan Service Cover Ratio (LSCR)
      A ratio that measures the extent to which the rental income from a certain property would cover the cost of the loan. The LSCR is typically associated with an amortising loan, like a repayment mortgage, where the original loan amount is repaid in regular instalments along with interest.
    • Loan To Value (LTV)
      The amount loaned to the SPV divided by the estimated value of the property. The lower the percentage is, the lower the perceived risk to the lender.Example: Property value is £100,000, the loan is £50,000 secured against the property. £50,000 (loan) divided by £100,000 (value) equals 50%.(...)
    • Loan unit
      A loan unit is the smallest denomination of a loan that can be purchased. Our loans have a minimum denomination of £100. As a result one loan unit can not be worth less than £100 when purchased in the New Sale market.
    • m

    • Mortgage
      A loan secured against a property.
    • Mortgage types
      Buy-to-let loanA loan on a property purchased specifically to rent to (“let out”) a tenant.Development loanA loan provided to a property construction company for the purpose of developing on land or developing a property. The loan is secured against both the land and property. The(...)
    • n

    • Net Income or Net Returns
      The meaning varies depending on whether you are a Share Investor or Loan Investor. Net income, or returns, to Share Investors are dividends after tax. Net income or returns are essentially net rent, which is gross rent less all property-related costs e.g. interest payments, maintenance costs,(...)
    • Net Profits
      Net profits are the profits after fees and taxes. This is only relevant to Share Investors as their returns are not known in advance.
    • New Home Builders Certificate (NHBC)
      A warranty program which protects the purchaser of a newly built property from the costs of remedying building defects. NHBC will be provided for a term of 10 years.
    • New Sale Market
      New property investment opportunities that are presented on the site with an Information Pack, containing the pertinent information you need to decide whether to invest.
    • Nominee
      A person or firm that holds assets such as shares in an SPV on behalf of another, enabling the nominee to handle complicated administrative matters.
    • o

    • Open Market
      Open market means marketing and selling by way of an arms' length transaction. It may be relevant to exiting your investment.Two months before the investment reaches the exit date, it is offered to our investor community on the site’s Resale Market. If the investment is not fully taken up(...)
    • Ordinary Shares
      Shares which represent normal equity ownership in a company. Ordinary shares generally entitle the owner to vote at shareholder meetings, receive dividends, and receive distributions on the winding up of a company, but do not carry preferential treatment.
    • p

    • Portfolio
      A group of financial assets such as shares, property or bonds, held by one person or entity.
    • Premium / Discount on Purchase
      The premium/discount on purchase is the difference between the amount paid for an investment and its latest valuation at the time of purchase. It is positive (a ‘premium’) when the amount paid is greater than the latest valuation at the time of purchase and negative (a ‘discount’) when the(...)
    • Property Cost
      The purchase price of the property plus all related transaction costs, including any refurbishment and development costs, if applicable.
    • Property Investment Platform
      British Pearl's website, enabling large numbers of people to invest (in minutes) in individual properties for as little as £100.
    • Property Value
      The latest property value is the most recent estimated valuation.For New Sales this will be the proposed purchase price, which in turn is supported by a chartered surveyor’s physical inspection and valuation.Thereafter we update this valuation monthly by indexing the purchase price(...)
    • r

    • Rental Yield
      The annual rental income of a property as a percentage of its total estimated value.Gross rental income/total estimated value = Gross Rental Yield. This is an important factor in determining the viability of an investment. Net Rental Yield is Gross Rental Yield less all costs including taxes.
    • Report on Title
      Provided by a solicitor, it comments on the extent to which the property title is good and marketable, and highlights any potential issues to the purchaser and/or lender.
    • Resale Market
      The market place where Share Investors and Loan Investors buy and sell shares or loan units in property investments that have previously been fully funded within the New Sale Market on the Site.
    • RICS Valuation
      A RICS valuation is a property valuation undertaken by an independent RICS chartered surveyor. RICS surveyors are chartered surveyors belonging to the Royal Institute of Chartered Surveyors, who are governed by very high professional standards. This form of valuation is deemed an industry(...)
    • Risk
      This refers to the chance that an investment's actual return will be different to that expected. Risk includes the possibility of losing some or all of the original investment. Usually, the greater the amount of risk, the greater the potential return. The reason for this is that investors(...)
    • s

    • Seed Enterprise Investment Scheme (SEIS)
      A UK tax scheme offering income tax and capital gains tax reliefs to qualifying private investors who invest in eligible early-stage start-ups.
    • Share Investor
      Is an investor who purchases shares in an SPV, hence they are shareholders.Share Investors, Loan Investors and Developers are collectively known as BP Members.
    • Share Subscription Agreement
      An agreement between a company and investors purchasing shares in the company.  It sets out the terms of the share purchase and details certain rights and obligations of the company and the investors as shareholders.
    • Share Valuation
      The share valuation is the latest valuation expressed on a per share basis.
    • Shareholder Agreement
      An agreement between a company’s shareholders detailing certain rights and obligations of the shareholders.
    • Shares
      An ownership interest in a company which entitles the shareholder to certain rights, for example a share of profits or dividend payments from the company. Shares are also referred to as “stock”.
    • SHIELD
      SHIELD is a contingency fund that we have the discretion to make available to any SPV requiring liquidity support where the SPV Reserve has been depleted. It is possible that an SPV could encounter a number of negative cash flow events at the same time, requiring funds in excess of the SPV(...)
    • Site
      British Pearl’s crowdfunding and crowdinvesting website.
    • Special Purpose Vehicle (SPV)
      Each property investment is owned via a special purpose vehicle (“SPV”), which is a UK Limited Company incorporated for the “special purpose” of purchasing a single property.Each property is owned by a separate SPV and investors in a particular property do so by becoming beneficial(...)
    • SPV Reserve
      Each SPV will have an SPV Reserve to ensure that void periods, potential maintenance and other negative cash flow events are properly provisioned for. The SPV Reserve will be funded by Share Investors as part of the initial transaction costs e.g. property 100K, transactions costs 5K, SPV(...)
    • Stamp Duty Land Tax (SDLT)
      SDLT is a property transaction tax levied by HMRC. It is incurred by the SPV on purchase of the property. SDLT is only payable on properties worth in excess of £125,000.The tax rates are tiered and increase in line with property values as below;0% SDLT on the first £125,000 of the(...)
    • Stamp Duty Tax (SDT)
      SDT is an amount payable to HMRC for acquiring shares in property investments on the Resale Market. Stamp duty is calculated at 0.5% of the value of the shares, with figures rounded up to the nearest £5, and is payable when shares are transferred. It is not payable when new shares are issued.(...)
    • Surveyor
      A RICS qualified individual who professionally examines the condition of land and buildings. Often used to advise on and monitor development projects.
    • t

    • Tenancy Agreement
      A legal contract between the landlord and the tenant. The agreement contains the terms and conditions of a tenancy, including the duration of the agreement and the rental amount payable by the tenant. See also, AST.
    • Total Return
      The total return of a property investment is the total gain or loss generated from holding an investment. The total return for a Share Investor includes all dividends received, capital gains generated less all transaction costs.It is expressed as a percentage or a total amount. For(...)
    • Transaction Costs
      Transaction costs cover all manner of costs including, but not limited to:British Pearls participation fee of 2% for Share Investors. Legal fees Surveyors fees Stamp Duty Land Tax (SDLT) Refurbishment costs
    • Trustees
      A person or firm that holds or administers property or assets for the benefit of a third party. They have a fiduciary responsibility to the trust beneficiaries and therefore trusted to make decisions in the beneficiary's best interests. A trustee is required to uphold a strong level of(...)
    • v

    • Valuation
      The latest valuation of property investment.
    • Valuation Gains or Losses
      The difference between the latest valuation and the valuation at the time of purchase.
    • Valuation Report
      A report which is created by a professional valuer estimating the open market value of the property, taking into account all risks and opportunities.
    • Value Added Tax (VAT)
      VAT is a sales tax. It is a tax levied on the purchase price of a goods and services at a rate of 20%.
    • Valuer
      A company which estimates the open market value of land, buildings and commercial property for clients. They will also provide their professional opinion on rental yields and re-let risk.

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